Stacey Sterzel – stacey.sterzel@decipher.co.uk – @DecipherDMR
Adrian Czerwick – adrian.czerwick@decipher.co.uk – @DecipherDMR
Over the past decade there has been a proliferation of devices on which television content can be viewed on demand. There has been much discussion around changes to audience viewing engendered by these devices, from mobile television to second screening. In 2014, significant improvements in video on demand services and devices by both television industry stalwarts, such as BSkyB and Virgin Media, and by newer players to the market (such as Google Play and Apple TV) have led to an increase in viewing of on demand content on the best screen in the house – the television.
Last month, we at Decipher published the results from Wave 5 of our Mediabug report – a bi-annual tracker of changes in UK media consumption – and the trend towards watching video on demand (VOD) on TV is clear. In fact, while online VOD seems to have peaked in penetration, TV VOD increased in monthly viewing by 9pp from Q3 2013. If it continues on its current trajectory, there is every indication that TV VOD will overtake online in terms of monthly usage in around 18 months.
There are two key trends which are driving audiences away from viewing on demand video on secondary devices and onto the main television screen.
The first is the roll-out of much improved VOD offerings by BSkyB and Virgin Media. Sky’s content library has the highest share of usage of any TV VOD provider with 27%. In particular, Sky on Demand customers are showing an increasing appetite for TV Box sets, with a 4pp increase in monthly usage since March. Sky’s Now TV offering has also seen early success – now with 5% penetration.
Virgin Media has seen similar success; 35% of Virgin Media TV homes use subscription video on demand service Netflix on their TiVo box at least monthly. This comes on the back of two periods in which Virgin Media has offered 6 month trials of Netflix to select subscribers. With Netflix now on BT Youview, and set to arrive on TalkTalk Youview boxes in 2015, TV VOD is looking to continue its growth on set top boxes.
The second key trend is the growth in ‘share of usage’ of TV-connected devices for watching Video On Demand. In our Mediabug report, we calculate the ‘share of the pie’ that each device contributes to consumption of VOD, and how this changes over time. Historically, laptops and PCs dominate the pie, however in Wave 5 they have lost 5% share to finish at 29%. Tablets also dropped 2% to finish 15%. What has grown has been Apple TV (+1%), Google Chromecast (+1%), Sky’s Now TV box (+1%), and Smart TV’s (+2%). These four devices now account for 20% of total share of online VOD consumption, and indicate an increasing preference for TV-based viewing.
It is possible that much of this is a result of the improvements in the offerings of these relatively new market players. Each brings the navigational benefits found on devices such as smartphones and tablets to the television set. Previously, a key benefit of viewing online VOD on smartphones and tablets was familiarity of the devices’ operating systems, ease of use and content search. It is not easy to bring the effortlessness of touch screen navigation to the big screen. Ordinary remote controls are not intuitive. It may seem frustrating that every time one wants to change a channel or search for a favourite movie, it cannot be done without glancing at the remote to find the appropriate buttons. Similarly, users searching for VOD content want to look at the screen and engage with the media, just like they were able to on touch screen devices. This lack of coherence may explain why it took a little longer for the consumers to start turning back to the TV screen to watch VOD in their living rooms.
Another factor may be the low price of these new ‘Over the Top’ (OTT) devices. The Google Chromecast dongle retails for £30, allowing the user to ‘cast’ media content from their smartphones and tablets straight onto their TVs. Firefox have also announced plans for a competitor dongle that looks likely to retail for even less. Sky’s Now TV box is available for £9.99 without a contract. It provides support for all major VOD providers in addition to the Now TV subscription service.
As VOD offerings by both television platforms and newer TV players begin to increase their awareness and usage among UK audiences, Mediabug data suggests that television content on demand will increasingly return to its natural home – the telly.
Note: Mediabug Wave 5 is now available. More information at: https://www.decipher.co.uk/mediabug