Are online services going to destroy the broadcast model?

Are online services going to destroy the broadcast model?

By Stephen Price,
Wednesday, 11th February 2015
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As Amazon signs Woody Allen to make his first TV series, are on-demand services poised to wreck the broadcast model? Stephen Price is sceptical

The traditional way of watching television, as a family around a static set in the corner of the living room, is over, we are told. TV ownership has – for the first time ever – declined.

Now it’s about subscription-based, on-demand content downloaded to watch when you want and where you want; we’ll all be binge watchers soon.

According to this view, the way we watch TV is at, or even past, a tipping point. If only it were that simple.

Technological enhancements have been part of the TV viewing experience for some time. Viewers have become adept at navigating their way around the schedules using Sky+, Virgin’s TiVo system and other PVRs.

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As reported in Broadcast magazine, the 5 January launch of the second series of ITV’s Broadchurch attracted 7 million viewers plus an extra 3 million, close to half as much again, watching via catch-up.

Downloading is gathering pace, too. In 2014, BBC iPlayer handled 2.6 billion TV programme requests; 4.2 million of those were for an episode of BBC One’s Sherlock, although 13 million people watched either the broadcast or a home-recorded version of the episode.

Ofcom’s Infrastructure Report 2014, published in December, remarked that, while most television is still consumed through Straditional linear broadcasting platformsT, change is in the air – driven mostly by technology.

Consumers’ desire for higher-­quality pictures and improved sound continues to grow. Ofcom noted that 69% of households now have HDTV, and that the focus is beginning to shift to ultra-HDTV in its 4K version.

Ofcom also said that the proportion of UK households with a TV is decreasing, albeit slowly. As ultra-HDTVs fall in price, it will be interesting to see if this trend continues.

Using Barb data, Ofcom also reported that nearly 1 million UK households are now broadband-only homes. So these homes get their programming via the internet and, perhaps, are more likely to watch the broadcasters’ and other players’ on-demand services.

These, of course, include BBC iPlayer and ITV Player, plus IPTV services such as Netflix (more than 10% of UK homes are subscribers) or Amazon Prime.

As the uncertainty around media-use gathers, anxious eyes inevitably turn to children’s viewing for clues to future TV viewing patterns.

Last November, Ofcom’s Children’s Digital Day research found that children aged 11-15 watched 1 hour 32 minutes per day of TV when it is broadcast. This is half as much as adults, who typically tune in for 2 hours 58 minutes.

There is much more TV around for children today. Thirty or 40 years ago, there was dedicated children’s programming for a couple of hours each day after school and on Saturday mornings. Now, children’s programming is available 24 hours a day on dedicated channels and on the internet. It’s not that children aren’t watching anything; they are watching plenty of programmes, but in a completely different way.

By the time they become stressed-out adults, they will be used to selecting their viewing from a range of different sources and devices. This will have as-yet-unknown consequences for future viewing patterns.

Soap operas used to hold families in perpetual thrall with tales of weddings, explosions and murders, usually crowned with a big Christmas special.

Now, however, they are in decline, even at Christmas: in 2010, BBC One’s EastEnders festive episode attracted 12.6 million viewers; in 2014, it managed just 8.6 million. ITV1’s Coronation Street pulled in 9.8 million on Christmas Day in 2010; by 2014, it had shrunk to 6.7 million.

Weekly entertainment events can still grab huge audiences but, even here, declines are apparent. ITV’s The X Factor, predominantly aimed at a younger audience, achieved 8.3 million viewers for the 2014 finale, compared with 10.0 million for its 2012 finale.

BBC One’s Strictly Come Dancing managed 11.7 million for its final in 2014, compared with 13.3 million in 2012.

Live sport, especially football, still gathers people together: the 2014 World Cup Final, shown simultaneously on ITV1 and BBC One, was watched by a total of 21 million people– 14.9 million on BBC One alone.

The Great British Bake OffThe Great British Bake Off

And big audiences are still possible elsewhere. Last year’s final of BBC One’s The Great British Bake Off, on 8 October, secured more than 13.5 million viewers – the biggest non-sport show of the year. Not bad for a cookery competition.

An interesting result of this technological arms race has been the rise and rise of drama, a genre that, not so long ago, was considered an endangered species.

In 2008, as the economic crisis deepened, television, especially commercial television, looked as if it could no longer sustain this most expensive and risky of genres.

Then, in the midst of the economic mayhem, ITV commissioned an original period drama. It was risky on every level: it was expensive, it wasn’t an adaptation of a famous book and there were seven episodes – a big commitment, if it didn’t work.

ITV had always done period drama – adaptations of Jane Austen’s Mansfield Park and Northanger Abbey in 2007, for example – but it wasn’t the channel’s speciality. Downton Abbey’s unlikely success meant that suddenly the genre was back in vogue.

It is no coincidence that subscription services such as Netflix and Amazon Prime have pinned their business plans on the creation of new, expensive dramas to attract subscribers.

Last month, Netflix reported revenues up by 23%, to $1.5bn, during 2014’s last quarter, stronger than expected. It is unlikely that this would have happened without House of Cards (a $200m commission for two series) or Breaking Bad (a one-programme marketing phenomenon that previously went unnoticed on Channel 5’s sister channel 5 USA).

Netflix’s latest £100m commission is The Crown, written by Peter Morgan and based on his successful stage play The Audience. The show is aimed squarely at middle-aged viewers.

In January, Transparent won two Golden Globes for Amazon Prime: Best TV Series and Best Actor in a Musical or Comedy Series for Jeffrey Tambor. Kevin Spacey won Best Actor in a Drama TV Series for Netflix’s House of Cards.

Subscription on-demand providers are TV interlopers no more. And now Amazon has signed Woody Allen to write and direct his first TV series at the age of 79.

But broadcasters still boast a long list of high-quality TV drama of their own. In 2014 alone: BBC Two screened Line of Duty and The Fall; BBC One showed Happy Valley and The Missing; ITV continued with Downton Abbey and kicked off this new year with series two of Broadchurch.

BBC Two’s Wolf Hall launched on 21 January with nearly 4 million viewers and instantly became the channel’s most popular drama for a decade.

Undoubtedly, things are changing and on-demand TV is growing. But humble broadcast TV last year stubbornly accounted for 88% of all viewing.

The signs are, for the time being, that traditional platforms will co-exist with the likes of Netflix and Amazon Prime.

Even the hardly impartial Reed Hastings, CEO of Netflix, predicts that traditional TV will be around for more than another decade.

SIt’s kind of like the horse, you know; the horse was good until we had the car. The age of broadcast TV will probably last until 2030,T he forecast last year.

There is no doubt that a House of Cards binge-watch can take up a wet Saturday afternoon before Strictly comes on. But one thing is certain, the quality of TV is rising and the viewer is the winner.