Separating fact from fiction: Changing household viewing expectations

Consumers increasingly find themselves overwhelmed by digital, with a myriad of services, technologies and use cases that are always available. It is one reason why consumers are looking to limit screen time and “digitally detox,” which is a trend that is already acute in content services.

Tracking content is now a challenge

Audiences are frustrated by how difficult it has become to keep track of their favourite content. The proliferation of different services means audiences must search across multiple platforms and channels. In 2018, 24% of viewers found it difficult to keep track of their favourite content, that number has now risen to 29%. The more concerning statistic is the level of frustration amongst younger audiences, who typically subscribe to and use a higher number of services. For the first time this figure rose to over 50% for 25–34 year olds from 40% in 2019.

Despite increasing levels of competition, viewers are still tuning into traditional, core content services. They associate these services with particular content, which includes both highly competitive and expensive to produce genres such as drama, alongside content that is largely unavailable on other services such as current affairs. For traditional channels, the challenge is to convince viewers that they can continue to compete on both quality as well as the range of content choices. 

Audiences are tuning into traditional channels

Perhaps counterintuitively, there is a resurgence in the perceived importance of traditional content services. For the first time, less than half of households (48%) agreed that they spend more time on the internet rather than watching traditional TV — a figure which has continued to decline. At the same time, viewership of traditional channels is on the rise. Currently 56% of households claim to mainly watch TV progammes on traditional channels, another year-on-year increase. This self-reported data hints at a growing appreciation for traditional TV among audiences. It may be at odds with the overall trend in viewing volume on these channels, as captured by audience measurement, but it does reflect rising perceptions of the value that these channels hold in the overall mix of content options.

Traditional channels benefit from the diversity of content

Among the different content options available, it is traditional broadcast channels that are the preferred destination for all major genres. It reflects both the quality and breadth of their offering but also highlights how streaming services are associated with specific genres. 

The major strengths of traditional TV channels are in genres such as news and current affairs, drama (particularly British) and documentaries. In contrast, the strengths of streaming operators are in US drama and films, where they are closer, but not yet on a par with traditional channels.

Presently, there is evidence of streaming providers attempting to diversify their portfolio into other content genres, particularly in documentaries but also sports and potentially current affairs. The level of ambition remains to be seen, as does the competitive response of incumbents. 

Streaming services lead on quality for younger audiences 

Traditional channels may appreciate the growing perceptions around their relative importance in the content mix, as well as being associated with a wide range of content.

However, they are losing ground in perceptions of quality. Big budget investments by streaming companies into drama production — reportedly costing in excess of £10million per episode — have driven a perception of a higher quality offering. While traditional channels still win with older audiences, they are losing the quality debate with younger audiences. Forty-one percent of those in the 18–24 age range see streaming services providing the best progammes and it is almost at parity in the 25–34 age range — 37% vs 35% — albeit just in favour of traditional channels.

As business models continue to evolve, content providers are experimenting with a mix of revenue options, continuously searching for a sustainable balance between paid for services and advertising. However, consumers are making more informed choices about where they see value and what they are prepared to pay for. Companies need to work harder to convince consumers of the value in different models.

Cord cutting could soon be a reality

We have seen a sharp rise in the number of households that claim streaming services represent better value than more traditional pay-TV. For the first time, over 50% of households see more value in streaming, a marked increase on 44% in 2018. For younger age groups, between 25–34 years old, 72% of consumers believe they get better value from streaming. So far the number of households cancelling their pay-TV subscriptions in favour of building their own bundle of streaming services, so-called “cord-cutting,” has been relatively limited but momentum could be about to increase.

When consumers were asked specifically if they would be willing to cancel their pay-TV subscription in favour solely of online streaming services, 35% of households admitted it was a consideration. For those aged 25–34, the number who expressed a willingness to build their own bundle rose significantly to 61%.

Redefining the role of advertising

Good news for traditional broadcasters is that viewer appetite for accepting advertising as part of their broadcast experience has continued to increase in recent years, with 40% now stating that they are more willing to put up with adverts on broadcast television than around streaming progammes. Of course, conversely, this reinforces the message to streaming services that viewers expect a more seamless and less disruptive experience; either ad-free, or better management of ad loads and with improved targeting and the use of more engaging and creative formats.

For streaming services, there is a growing proportion of customers willing to pay to avoid advertising altogether. A year-on-year increase reveals 24% of households state their willingness to pay a premium to have streamed, catch-up services without advertising. Of those aged 25–34, typically heavier users of streaming services, once again they over index on their willingness to pay, with 49% stating a willingness to do so.

Whether a broadcast channel or streaming service, their ability to compete for advertising with hyper targeted, online platforms, from social media to search, is dependent on their ability to offer advertisers meaningful insights into audiences. Significant investment in data collection, analysis and relevant ad tech has been made in recent years by both broadcast and streaming services. 

The challenge remains to convince audiences to share their data. While they understand that sharing data enhances the relevance of advertising and therefore enhances their overall experience, there remains a hesitation. Across all households, only 23% are willing to share personal data in return for relevant, targeted advertising. What is encouraging, is the willingness of younger audiences, who are happy to share data. It is more than double the average at 48% for 25–34 year olds.

With the further proliferation of content services and platforms, the survey highlights the priorities and challenges that content companies need to address to remain competitive. Consumers will gravitate to the services that offer the best mix of content wrapped in a seamless user experience, and advertisers will naturally follow.  If content companies are to achieve sustainable growth and long-term relevance, they need a strategy, culture and processes that understands where consumers are heading.