Despite years of predictions about the imminent demise of linear TV it is still very much with us. What keeps it going and who is watching? [Updated August 2022]
Here’s a headline we read recently that made us pause and take stock of things: ‘The death of linear TV: exaggerated, imminent, or simply premature?’ Nothing too unusual in that you might think, and you would be right. However if you follow the link you will find that it comes from a PwC report on the European Media Leaders’ Summit held in 2007.
2007. The fact that we’re even talking about it so long after the event took place suggests exactly what the answer to the question it posed then was: premature. But it was a fair question to ask. 2007 was a pivotal year which changed a lot of things in the industry and saw such landmarks as Netflix announcing that it would start streaming video and the launch of the first iPhone. 13 years later can the answer really still be ‘premature’?
Streaming not yet dominant...quite
As ever with these sorts of discussions, you can pretty much make the data show anything to support your argument. There are so many surveys conducted in so many different ways in so many different territories, that sift through the statistics, charts, and databases and you can make an argument either way. Fifteen years of headlines regarding cord-cutting would point in one direction, the fact that linear television is still here at all suggests another.
Nevertheless there is a meta picture that can be pulled out of it all; while streaming is probably set to become the single most dominant platform when it comes to television (and only last month in the US market, managed just that) it has to be remembered that a) the linear TV audience is still huge and b) there are some key differences in consumption patterns across demographic cohorts.
Two key data points illustrate this well. First, the aforementioned US figures that come from the Nielsen Gauge report for July 2022. According to this, the streaming audience eclipsed the cable TV one for the first time, reaching 34.8% of the audience as opposed to 34.4% for cable. Broadcast TV, ie free-to-air in the US market, is further behind at 21.6%. Perhaps the point is that combine cable and broadcast together and the linear TV market is still very much the dominant one with 56% of the market. And it is also perhaps worth pointing out that the seasonal fluctuations in the market always weaken linear TV’s showing over the summer months, with a lack of new content and a decline in the sports programming that underpins so much of cable’s continued reach. Come the autumn its figures might well start to tick up again.
The second comes from the UK and the Ofcom Media Nations 2022 report. This uses a slightly different way of looking at the numbers but shows, again, that linear TV remains the dominant single platform across the entire population with 46% out of a total daily video viewing of 5 hours and 16 minutes. Perhaps its key finding is the huge demographic fault line that exists in consumption patterns. Linear TV only accounts for 19% of viewing amongst 16-34 year olds but 76% of viewing for those over 65 and 59% for 55-64 year olds.
Viewers aged 16-24 currently spend less than 1 hour 53 minutes, in front of broadcast TV in an average day, whereas for those 65+ the number is 5 hours and 50 minutes per day — actually slightly higher than a decade ago.
These are a lot of numbers but the main takeaway is that linear TV still commands huge audiences and still has a huge reach. It would definitely be unwise to dismiss its importance as part of any future media strategy. It should also be pointed out that, at time of writing (August 2022), the world looks to be heading into an economic downturn with increasing pressure on subscription numbers of SVOD services as a result. We could pretty much refer to this as a seventh reason below: economic headwinds and shrinking household expenditure.
6 reasons why linear TV is still here
Another uncertainty to consider is that no one really knows how viewing patterns change with age. Whether the viewing patterns of the Millennial generation will hold true or change along with their lives and lifestyles as they age and raise families of their own is a matter of some debate. But linear TV looks very much like it is going to be part of their future mix for 6 reasons which we’ve summarised below.
1. Live events. While sports may not be the be all and end all of the Pay TV model anymore, they are still incredibly important. Despite some encroachment from the big streaming players, Amazon in particular, they remain scheduling that can command a large audience and very much the preserve of the big linear players (though operators need to pay increasing attention to how to stop piracy to protect investment). Also increasingly important in this area is entertainment in the shape of both large Light Entertainment programs with attached live voting procedures and long-running reality TV programs of the Love Island/I’m a Celebrity… ilk that can build audiences during extended runs.
2. Targeted advertising. Being able to target audiences down to the household and even individual level is a powerful draw for advertisers and targeted advertising is taking up an accelerating proportion of advertising spend. Technologies such as ATSC 3.0 and HbbTV provide the return path that is crucial for targeted advertising to work even away from the Pay TV delivery ecosystem.
3. Innovation. The best linear TV operators are looking at new ways of engaging with their audiences and using their broadcast reach to add reach into the digital world as well. By creating additional content around their top properties they can chase a second screen audience that extends way beyond the transmission time of their programs and take advertisers along with them.
4. Expertise. Linear TV companies are experts in many things and have large infrastructures and in-house skillsets capable of mounting even the most demanding broadcasts. And even if those skills and resources are now outsourced, the expertise in project management is often key to making them happen. This is especially true when it comes to covering major events and the global news agenda;
5. Which brings us to Trust. This is ephemeral and difficult to measure, but linear TV broadcasters are part of the cultural fabric of many countries and often feature large news gathering operations. They may not always be the first choice for entertainment programming any more, but for major events they still occupy a premier place in many viewers’ minds.
6. The Hybrid Approach. If you can’t beat ‘em, join ‘em. The establishment of VOD and even SVOD arms to the linear TV business is now a well established tactic, and is getting easier with the advent of Cloud TV services. This has even seen erstwhile rivals collaborate, with aggregation and super-aggregation an increasingly common play in mature markets.
Linear TV is not dead. To paraphrase (parrot-phrase?) the famous Monty Python Parrot Sketch it is not even resting or pining for the fjords. It is still here and it is still relevant.
Fifteen years ago, the PwC report on the European Media Leaders Summit talked of the future importance of integrating broadband and broadcast content and being able to watch either on both TV and PC.
“If this hybrid environment does evolve, then the future may not revolve around the death of television, but around new life for digital advertising,” it concluded.
Fifteen years on, the conclusion is roughly the same.