Posts Tagged ‘TV’

You get what you pay for

September 12th, 2011
A Thinkbox blog by David Brennan for Brand Republic
January 15th 2010.

 

They were not quite Christmas presents but, in the past month or so, three pieces of independent research have landed on my desk, all of which run counter to the prevailing wisdom (cf. Chris Anderson) that ‘free is best’ and paid for media have had their day.

The first piece of research came from Kantar Media (part of the WPP Group) who looked at consumer willingness to pay for different media experiences. They looked at willingness to pay for content across newspapers, radio, mobile phone, internet and television.

The research shows we are expecting many things that we have traditionally paid for to be free; music and news access are just two of the most high profile examples. But there was one area of media where consumers value the experience so much that many of them are prepared to pay for it at a time when the crowd is supposed to be dashing in the opposite direction. That was for long-form, immersive, narrative-driven, audio-visual entertainment; consumers call it TV.

Just a couple of days after receiving that research, I attended a hugely insightful briefing at Oliver & Ohlbaum which demonstrated the resilience of the pay TV sector during the current recession. Although most forms of discretionary household expenditure are being cut, one of the few to remain steady was in-home entertainment and, within that category, the most resistant of all to household cutbacks was pay TV. This was absolutely in line with a report from Deloittes just a few weeks earlier. It is obvious that, at a time when people are being restricted in their ability to go out and socialise, they are instead spending on TV access at home to sweeten the pill. This has resulted in a bumper year for both BSkyB and Virgin Media in terms of subscription revenues and again demonstrates that people are prepared to pay for what they value at a time when many businesses are struggling to adapt to ‘the power of free’.  Ofcom’s August 2009 Communications Report showed that UK TV subscription income, at £4.36 billion, is now higher than both TV advertising revenues and the BBC Licence Fee income.

Finally, a statistic from Screen Digest really caught my eye. Despite the deluge of ways to access on-demand television – from digital recorders to web TV to closed source IPTV services – the total share of European DVD sales taken by television series has almost tripled from 5% to 13% in the three years between 2005 and 2008. This has mainly been driven by France and Germany, but even in the UK sales have beaten the market trend.

All of these growing sources of cash are proving crucial at a time when advertising income has been squeezed by the recession, because it ensures that investment in quality programmes can continue.  TV advertising income is still vital of course.  When advertisers spend on TV they are investing wisely in two ways: for their brand and for the future of the medium that returns so much to them.

So, whether it is access to on-demand content, willingness to pay subscriptions for pay TV packages, or the resilience of the boxed set DVD market at a time of unprecedented free access to TV content, consumers seem willing to spend money on the TV they love even when pressures on their purses or pockets are stronger than ever. Surely cause for celebration…even from Rupert Murdoch!

You Get What You Pay For

July 13th, 2011

They were not quite Christmas presents but, in the past month or so, three pieces of independent research have landed on my desk, all of which run counter to the prevailing wisdom (cf. Chris Anderson) that ‘free is best’ and paid for media have had their day.

The first piece of research came from Kantar Media (part of the WPP Group – take note Martin Sorrell), who looked at consumer willingness to pay for different media experiences. They looked at willingness to pay for online content across newspapers, radio, mobile phone, internet and television.

Consumer Willingness to Pay

The research shows we are expecting many things that we have traditionally paid for to be free; music and news access are just two of the most high profile examples. But there was one area of media where consumers value the experience so much that many of them are prepared to pay for it at a time when the crowd is supposed to be dashing in the opposite direction. That was for long-form, immersive, narrative-driven, audio-visual entertainment; consumers call it TV.

Just a couple of days after receiving that research, I attended a hugely insightful briefing at Oliver & Ohlbaum which demonstrated the resilience of the pay TV sector during the current recession. Although most forms of discretionary household expenditure are being cut, one of the few to remain steady was in-home entertainment and, within that category, the most resistant of all to household cutbacks was pay TV. This was absolutely in line with a report from Deloittes just a few weeks earlier. It is obvious that, at a time when people are being restricted in their ability to go out and socialise, they are instead spending on TV access at home to sweeten the pill. This has resulted in a bumper year for both BSkyB and Virgin Media in terms of subscription revenues and again demonstrates that people are prepared to pay for what they value at a time when many businesses are struggling to adapt to ‘the power of free’

Finally, a statistic from Screen Digest that really caught my eye. Despite the deluge of ways to access on demand television – from digital recorders to web TV to closed source IPTV services – the total share of European DVD sales taken by television series has almost tripled from 5% to 13% in the three years between 2005 and 2008. This has mainly been driven by France and Germany, but even in the UK sales have beaten the market trend.

So, whether it is access to on demand content, willingness to pay subscriptions for pay TV packages, or the resilience of the boxed set DVD market at a time of unprecedented free access to TV content, consumers seem willing to spend money on the TV they love even when pressures on their purses or pockets are stronger than ever. Surely cause for celebration… even from Rupert Murdoch!

The Eye Magnet

July 5th, 2011

As I sometimes get called ‘Statto’ it is only fitting that I start with a stat.

99% of our time spent looking at AV content on screens at home is spent looking at the screen of a TV set. So says a new ethnographic study in the US by Nielsen/CRE. The screens of PCs, laptops, games consoles, mobiles etc. make up the remainder of our home screen time, says the study.

There are obvious reasons behind our preference for the largest of the small screens when it comes to watching TV. Among other things, you don’t have to hold it, squint at it, wear earphones to use it, refresh it, or uncomfortably crowd round it to share the experience. That 99% highlights that it is still a compromise to watch TV on a laptop or PC, never mind a mobile device, although it is a compromise that will have to be made less often as online TV services arrive on TV sets.

But the main thing about TV sets are that they usually look the best and, with upwards of 40% of UK households owning HD ready sets, more are looking better all the time.

HD is just one of the technologies that have made the TV viewing experience more attractive and have magnestised viewing to the living room. Along with larger screens (growing about an inch a year), surround sound, digital television recorders…recent massive consumer investment in TV equipment has created a higher impact experience.

And so we watch more. The CRE study found that HD increases viewing by more than 5% (especially sports), backing up another US report – the Myers Report – that found claimed engagement with advertising on HD channels for viewers with HD sets was a whopping 10% higher than for standard definition.

And so to the future. As convergence gathers pace, new viewing developments like HD, Super-HD and 3D are likely to raise the bar in terms of what viewers expect of content formats. In doing so, I think there’s a good chance that they will maintain some clear water between the standards of professional ‘TV’ content and the longer tail of niche or user generated video content.