Brand Lab Re Invention of TV Presentation

There is so much complexity in the TV world. There's so many different players and new entrants and different ways to watch TV nowadays and things are changing so quickly. I started at BBC Worldwide about a year ago. My head's been spinning for most of that, trying to work it out, but Gary has worked quite a lot of that out. So by kind of paying attention to all the different headlines that are going on, by really immersing yourself in the industry and by looking at all the data, not just the headlines, actually, it is possible to have quite a good grip of what's going on. It's possible to see what the underlying patterns are and it is possible to tell a story around that. That's what we're going to try and do today.

Yes. Okay. The first thing we're going to look at is the market context. So exactly how are people consuming content and watching TV today? As David was saying, you don't need us to tell you it's an incredibly complex world. It's competitive, challenging, ever changing. But we'll try and make some sort of sense of it for you today. Obviously, it all differs a lot by region, by country. So what we'll do for the sake of this is we'll look at the main markets, so the bigger markets, because that's where most of the action is, and they've got a lot of the different services and we can see how it's playing out for them. So we'll start with looking at linear TV viewing. So this is what we'd always call traditional TV viewing. So it's your bog standard linear viewing. So that's where someone sits down in front of a TV set and watches live or watches something they've recorded within a set amount of time. So industry standard time. So in the uk that's within seven days, it differs by country. But in the us, for example, it's three days, but it's never any more than seven days. So it's what we've always referred to as traditional viewing. So this is the thing that's supposed to be taking a real kick in with all the new ways of watching tv, digital ways, online, all of that kind of thing. You see headlines like this, okay, so fewer people never are watching tv, TV dying, all of this kind of thing, half of it's bollocks, okay, Because a lot of it's just from. Either it's either from vested interests or it's pure clickbait, sensational headlines. So let's have a look at exactly what is going on. So this graph, we're not going to try and kill you with numbers, by the way, in this or kill you with graphs, but we've got some good stats, the sexy stats, where we've got them. Okay, so this is average, this is for linear tv. Okay, so it's average amount of viewing per person per day, okay. Over the last three years. So you'll see from that, that and this is in the main markets, it's actually very stable. There's slight declines in most of the countries, but that's generally kind of 1 or 2%. The UK is the line that goes down. Okay, but we'll come to that in a second. We'll look a little bit deeper into that. But the thing to really look at here is down the left hand side where it says hours and minutes that the average person is watching every day of linear tv, it's still loads at the bottom there. China and Sweden, it's got just under two and a half hours a day and they're traditionally a little bit lower. You look at the bigger Western markets, it's generally between about three and a half and four and a half hours a day, which is a huge amount. So just plonking yourself down and watching the telly is still the most popular entertainment pastime by miles. So all the stories about it dying, it's dead. People are leaving it in droves. It's not true at all. However, let's have a look at the UK because that's an interesting one. You might have seen some stuff in the press about it a few weeks ago. It's a bit of a brouhaha when people have seen that the line's going down. So this is, it's a timeline effectively of average linear viewing in the UK over the last 10 years. Okay. And all the things that are dotted in there, all the things that are either new ways of watching TV content or consuming content, or things that have launched that will put pressure on people's time and could potentially have taken them away from a TV set. So the first thing to notice there is that in 2014, the average amount, 3 hours and 41 minutes, pretty much exactly the same as where we were 10 years ago. And you think about 10 years ago, it was nowhere near the competition for people's time that there is now. It was the early days of PBR, no OTT, no iPlayer or any of those things. And actually what's been said about the TV industry is that it's changed more in the last five years than it has in the previous 50. And this is a good chart that shows exactly why that is. But there is a bit of a decline, as you'll see in 2014, 2013, 2014, because it's important to remember that TV viewing doesn't exist in a vacuum. There's all sorts of pressures that are on it that make people's decisions to sit down and watch TV. So 2010, you did see it went up quite a bit. That's because we had a new bar panel. So that was an entirely new set of people with new behaviors. So it did see a bit of a jump there. That was probably down to that. Of course, around about that time, in 11 and 12, it was. The recession was on. And recessions are generally good, very common for TV viewing because people have less money, they go out more, they stay in, stay in, they watch tv. There's more people out of work and there's been numbers done on that, that show, that they watch more tv. So as the economy recovers, more people are in work, you would naturally expect overall TV viewing to decline slightly. Of course, there's all these new pressures on it as well from the OTT services and all of those that we'll come to. So, yes, it's going down a bit, but it's still remarkably stable and still remarkably popular. If we have a look what's behind this dip even a little bit further, what we're finding is people aren't abandoning live tv. So this is weekly reach. So the percentage of the population that tune in and watch TV in an average week, OK, this is in the UK again. So you see it's between 2010 and 2014, the actual percentage of people that tune in and watch TV is still at 94%. 94% of the population will watch Suntelli every week, exactly the same last year as it was in 2010. But as we get to the heavier viewers, so as we go across, you'll see where it says 20 plus hours. They're the ones that are beginning to watch a bit less. So what we're finding is. And they're the people, because they're so into tv, they're the ones who are likely taking OTT services, They're wise to catch up services, VOD services, watching online. So they're reducing their linear time a little bit, but they're actually. Their overall consumption is higher because they're using these other sources. But the theory that people are abandoning linear TV is just not true.

So it's remarkable. Right, if you look back at the headlines on the first page, These are like legitimate headlines that get written in legitimate publications. And these are the things that I was getting every day when I started here and I just couldn't. But I'm hearing like the opposite. I just couldn't work it out. It's totally remarkable, right, how messy and clouded the debate is here. So. And it's also remarkable how when you put the right data in the right context, how not only do you get a different story, but you get like a really compelling and useful story.

Yeah, I mean, it goes on in terms of. We look at what's happening by age. Okay, so this splits. This is average linear viewing per day by age over the last four years. So it goes from 2010 to 2014. Those year on years are 14 versus 13. So you'll see, probably as you would expect, that the biggest declines are in the younger age groups. But the youngsters are still watching a significant chunk of linear TV. So it's still, I mean, for children there, 4 to 11, it's still two hours a day on average and a little bit more to get to 16 to 24, 1634 S. The thing to note with this is that none of them are just abandoning it totally. Okay. And there's a lot of thought and it goes back to the headlines again that youngsters are not interested in tv. We're raising a. A generation of young people now that are far less inclined to pay for TV or watch a linear schedule or anything like that. So we don't know. We don't know if this generation will exist. We won't know for another five or 10 years. But the whole argument seems to be based on what people are doing when they're 10 or when they're 14. Them continuing to do that seems a little bit of a spurious argument. If I was still doing what I was doing when I was 14, I'd just be spending all day riding a BMX and thinking about Belinda Carlisle and things. But I don't ride a BMX anymore. So we'll see what happens there. Do Chord Nevers actually exist? We don't know. It's a little bit of a spurious argument so far, but the overall message from this whole first bit is that linear TV is far from dead. People still love it, but there is a shift going on. It is declining slightly and that is differing by age range. And that's all down to the new devices and new ways of viewing, which David will talk about now.

Pardon me. So people are engaging differently with technology nowadays. There's so much technology in the world, and it is having a huge impact on how people spend their time. So this graph looks at lots of different countries around the world, all sorts of different interesting countries, and the similarity is across all of them is that TV in green is a significant and almost always is a significant part of people's lives. The similarity is also that there are all these other screens in people's lives nowadays, and this is the time spent on those screens, that people are spending time on all sorts of other screens that just didn't exist years ago. Right. So laptops and smartphones and in some countries, significant amounts of time on tablets. Nowhere near as big as smartphones and laptops. But we know TV's a big part of people's lives. But just look at all these other screens that are in people's lives nowadays and just look at how much time in each day they're spending on these screens. It's really significant. So, yes, Lydia, TV is holding up and is a core part of people's lives and there are big numbers still. But be aware that there are challenges to people's time. That story is also absolutely real. I think the other point here then is if you think about what we exist to do at BBC Worldwide, what our job is, if we're the world storyteller, if our job is to help people to tell stories, well, the core of that is long form content, of course. But just look at all the times people are spending on other screens and just think about how we could be extending those stories in a better and richer and more engaging way for all the other screens that people have in their life. So whether it's short form versions to capture some of the smartphone time that you see there, we know about video on demand and other activities on laptops and tablets. But just think about how much time we spend on the core product, long form, linear. Think about how much time people are spending on all these other screens. And every day, let's think about how we can extend those stories across multiple screens. So this tells a similar story to the last one, but in a way I really like. So this is in the US and it's a survey question that is like, which devices can you not live without? What are your top three? And if you look at baby boomers back in 2009, TV was their number one thing they couldn't live without. Print was two and Internet was third. But fast forward to 2014, they're still spending time on TV. For baby boomers, very similar amount of time watching TV, but it's not their number one anymore. It's not the thing they can't live without. PC and laptops for baby boomers have become the thing they can't live without. TVs in second place, still a pretty good place to be. So time hasn't shifted, but the importance of it in their life has shifted. If we look at generation X, in 2009, it was TV number one, but it had been dropped down to third place by 2014. PC and laptop first and smartphone had crept into second place for that generation. And then the famous millennials. TV wasn't their number one in 2009. It never was. Is the third place behind PC, laptops and then cell phones as it was while cell phones swapped for smartphones in 2014, the TV's still there, it's still in third place. And then Generation Z, really the kind of more worrying one. And the younger generation, you notice that TV is not even on the list of top three. So video games as well as smartphones and PCs and laptops. So yes, the amount of time people are spending on TV is holding up. Yes, the share of people watching TV is holding up. But these last couple of slides show there is this huge additional demand on people's time. So there is the priority of the TV is lessened in people's lives. So there are some real challenges there as well. One of the ways in which technology is impacting tv, obviously, is time shifting. And if you look here, this is Doctor who across the uk, US and Australia averaged out. It's very different in each country. We've averaged them out. To give you a sense of how Doctor who has changed over the years, if you look back at season one, there really wasn't very much time shifting going on. It was a really small part of how people were consuming Doctor who. Everything was live, lovely. And that stayed for a few years. And then you had a big change around season four, season five, and by the time we got to season seven, close to half, not quite, but close to half of viewing was time shifted. 50, 50. The time shifting is 50, 50 on same day or days 1 to 7. So you still got the vast majority of people watching it as close to the date it aired, the time it aired, even as they can actually, you know what, pretty similar behavior to watching the show live. But we definitely are moving away from literally live viewing to a world for Doctor who, which is close to 50, 50 live versus time shifted. And I think that's 5050 is quite a big number compared to other dramas. So this is the UK average Amongst homes with digital recorders, drama is the highest most time shifted genre, usually 35%. So for Dr. 2 it's 50 more time shifted than normal. Drama is the highest in other genres. It's less manifest than it is in dramas as well, but playing a role and an increasing role across the board. So we are seeing new behaviors within linear TV viewing. And then one more piece of analysis for Doctor who I think is really interesting. This looks at all the different ways you could watch content from season eight, the majority of which is full episodes and you see that live and this is like the number of people who watch them. So live TV is the biggest single way people watch content from Doctor who season 8 in the UK. Video on same day as live is a big chunk. So time shifting on the same timeshift in days one to seven we saw before adds up with the other time shifting to be about half of the linear viewing. But there's other really important ways people are engaging with. Even if you just take season eight. So iPlayer is significant, 7% of the total number of people reached. And then you've got the other slug here of YouTube which is not full episodes, it's non episodic content, but it's still people engaging with that season. So think about the wider aim of ours to get season eight out there and to engage people with season eight. That still counts in that sense. So not only is time shifting becoming more important, but other ways of consuming the full content or other non episodic content is becoming increasingly important. And the real challenge with that is that we used to be able to take TV measurement for granted. We used to be able to look at measurement ratings and told us the picture of what was happening with our content, which is just not the case anymore. Still the foundation and the bedrock. And it's still a hugely important part of how our content is consumed. The biggest and most important part of how our content is consumed by far. But there are all sorts of other ways that our content is being consumed which do not feed into that measurement. And so we need to be cleverer more and look at more data sources to get a full picture of what's happening with our content in the world. So not just YouTube and iTunes and iplayer as we saw in the last one, but also think about people who DVR the show but don't watch within the seven day window. Think about all people who pirated it. Not a big deal in the uk, but in some countries it's a big part of how Doctor who's consumed Think about broadcaster or pay tv, video on demand services which are not measured or not captured. Smart tv, online consumption, of course, people watching it during the Netflix window and anyone buying DVDs. So if you think about the Doctor who season 8 overall or our shows overall, a big part of the picture is now not in the measurement system. It's a big challenge for us, I suppose.

The main thing that's not measured where there's virtually no visibility at all, is in the whole OTT area. So OTT are three letters that are supposed to strike fear into traditional TV companies. But let's have a look at exactly what's going on there. So the business model that's winning out in ott, of course, is subscription. So it's the SVOD services. So the daddy of them all, of course, is Netflix. Latest report came out last week. 60 million subscribers now, 40 million in the US and 20 million internationally. But let's have a look at all SVOD services. So how many people have actually got them? Okay, so this is. Yep. Sorry, I thought that was a question to the audience. All right. Okay, go on then.

Yay.

So there you go. The answer's for you. The scale on this is kind of skewed, I suppose, because the US is miles ahead of everyone else. Really mature, established SVOD market over there. So you can see it's actually in about. I think it's about 70 million U.S. homes now have an OTT subscription. So that's 55% of all U.S. homes an OTT subscription. It's an enormous number. The market's really taken off there, and you can see in the other some other major countries how it's taken off there. I think in the UK, we're currently at about just over 8, and it's forecast to go to about. I think that's about 11 and a half by 2018. But those forecasts are changing all the time. The main issue with SVARD and these OTT services, of course, the main fear was if you go back a couple of years was are people just going to abandon pay TV and go to OTT services because they're a lot cheaper, far more flexible pay tv, you have to buy into bundles of stuff, a lot of which you never watch. So it was seen as being a real threat to pay tv. But what we're actually seeing happening is something else entirely. So if we have a look at pay TV subscribers, okay, so this is since 2008, and it's got forecast 2018. From just looking at it, you see it's remarkably Stable, it's pretty much flat for pay TV now. Within that you'll have some operators who are suffering. Certain platforms that may suffer a bit more than others. So in the us for example, cable has always traditionally been incredibly dominant. It's pretty much been the only game in town. But now there's satellite and IPTV there. So people are churning out of cable a little bit, hence some of the sensational headlines, but they're actually just going to another pay TV platform. So they're staying within the pay TV world, hence fairly flat numbers. So there's no, at the moment, there's no indication that there's the so called cord cutting going on in favor of ott. But what may be happening, another big buzzword around is called shaving. So people will actually just reduce the amount of channels they have on pay tv. They'll just go to a base pack, for example, rather than having all the extra packs. Well, that would be reflected in the overall revenue that pay TV companies were taking. We're not seeing that either. So they're remarkably flat as well. A little bit of growth. Obviously in the us there's a fair bit of growth still in the pay TV market. So what we're actually seeing is what we're calling doubling up. So people have pay TV and they get OTT service as well, because it's only a few quid. And you know, there's a lot of programs on there that have quite a lot of buzz, House of Cards and Oranges and In Black and all of that kind of thing. There's no official numbers released on this Netflix, all those kind of services, notoriously tight with their information. They never tell anyone anything, but they don't have to. So we don't know on this. So that's why we're running our own SVOD projects where we're monitoring certain number of people, quite a lot of people in the UK and the US that are OTT subscribers to see what they're watching, what makes them subscribe and all of these kind of things. And one of the things we ask them is, do you have a pay TV subscription? And what we found when we ran the pilot of this last year in the UK, 72% of them did. So 72% of the people with SVOD subscriptions also had a pay TV subscription. The 54% there in the brackets is the national average. So the national average in Britain is 54% of homes have pay TV. It's a little bit higher now. Same thing for the US there. But not only that what we're also finding is not only do they have a pay TV subscription, an OTT subscription, they have more than one OTT subscription. There's a significant number of people that have two OTT services, and there's even some that have three. So these people are tele addicts. They must have square eyes. So it goes back to the slide we had earlier on with those heavy TV viewers. They're a little bit less on their linear TV viewing, but they're the people who are getting into these services. So overall TV consumption is going up, consumption of content is going up. And that's the great news for us as a company, of course, is that people just can't get enough of content. No wonder there's an obesity crisis. But it's good for us. People are just plonking themselves down and watching tv. So another thing that we want to talk about as well is with so much choice around, what is the power and the importance of brands? Because obviously that interests us mostly here as a brands department. How are people actually choosing what to watch, what channel to watch, what program to watch in a world with so much choice, okay, so there's people around and you'll have seen presentations here probably where people will say, there'll be no such thing as TV channels by 2020. Why would somebody want a TV channel you can sit down in front of the TV and buy. In a world with TV delivered over the Internet, you could watch virtually anything you want. It's a world of infinite choice. Now, you may believe that, or you may believe that with so much choice around, trusted brands, trusted content, trusted curation has never been more important because people are more likely to gravitate towards that when faced with just. It's the agony of choice. There's a great quote that says, choice is cherished, but choosing's a chore. I wouldn't say that when I was drunk, but did you see what I mean? It's a bit like going into a restaurant and being given a menu. And it's every dish there's ever been. You just think, oh, crust. You know, you'd look at the first page and then just choose something you knew you liked. But the whole issue of content discovery, why do people end up watching what they do when they've got so much choice is something that's really interesting to all TV broadcasters. And there's quite a lot of studies going on to try and establish what that is. So there's stuff that looks at the relationship people have with TV and why would they sit down and watch live tv. So there's things about the power of now, the power of having a social shared experience and lots of things like that. And this is a study that was done by the BBC last year with about two and a half thousand people over a couple of days. It was literally just trying to find out why did they watch what they watched. It was quite interesting because the vast majority, 82%, knew what they wanted to watch when they sat down, whether that be just a channel they just go straight to, or they knew about a program, okay, so they've seen some marketing or some trailers, promos, whatever it might be, they knew what they wanted to watch and when they didn't, they'll either scan around on an epg, they'll go to their PVR and then after that they go to a VOD service. So that's kind of the decision process that's stuck going on for most people. Now we've done something similar with our SVOD study and we're finding in the uk, even specifically for SVOD homes, that kind of process is still the same. In the us it's a little bit different. The VOD and PVR is quite even because obviously SVOD is far more established over there, but people still start with live and with linear. So all the things that we do as a brands department, in terms of the great work around our programming, our channel, positioning, marketing, everything we do has never been more important really. And what we're finding in some parts of the business, we'll tell you, is that some pay CV companies, the platforms are now using the threat of ott, these new ways of viewing as a way of trying to reduce the amount, amount of money they pay to the pay TV providers saying we're under more pressure to keep our subscribers, we're having to launch our own services, our own OTT services like sky with now just to survive. So they're trying to do it to beat down what they pay to pay TV providers. So channels are having to work harder than ever to prove their worth to pay TVs, to show that they are what audiences want and are keeping them paying for a pay TV TV service. So all of the work we do has never been more important than ever. And as you can see, the way that people find content is still quite, still in quite a traditional form.

So we want to wrap this up and hopefully you've got a ton of questions and we can get some good discussion and some good debate going. But to wrap up where we think the story is, having again studied all of the data and read everything there is to read, throwing out the stuff that we should throw out and really focusing on the stuff that is a good and important and unbiased source, that. Yes, of course things are changing in the industry. There's a ton of change going on. But if you look at the numbers on linear TV consumption and if you look in particularly at mainstream viewers, it's a very slow revolution, not this kind of chaotic disruption you might pick up if you, if you read all the blogs and all the newsletters that fly around the industry. So the large proportion of viewers, the mainstream viewers who consume the most content, are still largely unaffected in the core behaviors. But there are all these effects happening all around the edges. Yeah, established TV providers still the most trusted and it's still the most important thing for people finding content. It is easy to forget if you focus on all the excitement around Netflix or if you focus on the excitement around BBC Worldwide developing a video on demand service of our own, it's easy to think that channels are taking the back burner. No, as Gary said, they've never been more important. But yes, we must do those things in addition. And the real challenge, I think, is that we need to understand what's going on in the world, tell the story through all this chaos so we really have a good grip on it. And then the challenge is going to be adapting to that. The challenge is going to be keeping up with that and working out what we do as a result. The challenge is not the death of the industry, as you really might think reading the headlines. The challenge is understanding, which is today and adapting to day in, day out, this kind of changing landscape. So think about different audience segments with different needs and OTT or linear or catch up and making sure that we deliver the right experience for the right people across all these different segments is going to be a really important part of what we do. But see all these new entrants, these new services, these new ways of consuming, see them as new opportunities to get our content out to people in new ways. Definitely don't see them as the threat, as the death or as the end of the world we used to live in. And we think that again, looking through the data, telling the right story, understanding what's happening, really understanding what's happening, and then hopefully having the conversation we're about to have and the questions we're about to have is exactly what we need to do if we're going to survive in this world. So we're going to keep looking at the data plug our weekly newsletter, Insight this week. If you're not subscribed, then email one of us and we'll add you on the weekly list. Every week we go through the headlines and try and work out what the real story is behind the headlines, and we hope you have a lot of questions. Anything else?

No. I think the only thing says the great news is people are consuming content more than ever. It's just spread across different devices, different services now. But as David was saying, we're doing everything we can to stay on top of that and keep the business informed about what's changing, what are the extent of those changes and then what are the opportunities that gives us, to some extent, your guess is as good as ours. We might sit here in a year's time and be telling a completely different story or we might be saying the same thing. I mean, that's what makes the whole, you know, makes it such an exciting game, I suppose.