The More Things Change, The More They Remain The Same

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Once a quarter, Nielsen takes a break from ruining the mood of TV executives who can’t understand why their shows don’t get higher ratings, and delivers the calming message that all is generally OK in the TV industry.

Last week was no different.  Nielsen’s Cross Platform Report for the fourth quarter of 2011 showed once again that for all the hyperventilating about Hulu, Netflix, Rokku, Apple TV, Blu-ray players, iPads, smartphones and other potential TV-busting devices, television viewing habits remain largely unchanged.

As someone who formerly helped prepare this report, I know that it’s almost impossible to find something new to say about these results, which largely remain the same quarter to quarter, and even year to year.  Oh, device penetration evolves and there are occasional movements within demographics, but the fundamental fact is the same every quarter: People watch a ginormous amount of television.

Once again the report tells us that the average American watches nearly five hours of television a day, 98% of which is consumed on a traditional television. And with Americans still gobbling up HD television sets (eight million more homes have them than the year before), TV viewing numbers will probably stay high for the foreseeable future. After all, why buy an HDTV if you’re not going to watch it?

To the extent that there are any surprises, it’s that there are no surprises. It’s remarkably hard to change the habits of the American TV viewer.  Even now, more than ten years after the introduction of the DVR, only 8% of TV viewing is timeshifted (and about half of that is watched the same day it’s recorded.)  And even four years after the launch of Hulu and other online services, Internet viewing represents only 2% of all video consumed.

If there is a Trojan horse in the American living room, it could be the once-lowly game console, which gives viewers easy access to movies, television shows and other online content.  Given that there are now more consoles than DVRs in the average home, it’s not surprising that viewers spent 30% more time on consoles in Q4 2011 than during the same period in 2010.

Nielsen reports that the number of people viewing video on smartphones is up 36% over last year.   But even so, total viewing remains miniscule, with the average American watching only eight minutes of video on a smartphone per month.  This number will probably never be very big because of the unsatisfactory experience of watching television on such a small screen.  Tablet viewing, on the other hand, will be a different story.  The number of iPads now in circulation is relatively small compared to television usage, but tablet viewing, with its high quality and convenience, will grow as penetration increases.

One Nielsen finding that generated a fair amount of news media attention was the small decrease in total video viewing. This decline -- about a minute and a half per day -- could be a statistical rounding error, or it could mean that the engorgement of the American home with new video platforms devices has finally made a dent in the viewing of traditional television.

To better understand this trend, if there is one, we would need to look more closely at year-over-year demographic behavior, which Nielsen does not include in the report.  The dirty little secret behind the steady decades-long rise in total television viewing is that it’s been driven in part by the aging of the population.  Each year another cohort of Baby Boomers ages into the 65+ demographic, where the average viewer watches 47 hours of television per week.

It would be particularly interesting to know what’s going on with the 18-34 demographic.  This is the group most attuned to new technologies and most apt to cut the cord with their local cable or satellite provider.  If their viewing shows a decline, this could be a long-term worrisome trend for the television industry.

But even if 18 to 34 year olds are disinclined to watch ad-supported television the traditional way, two things have to be in place for them to move to other platforms: 1) watching television over the Internet has to be as easy to watch as tuning into a regular television; and 2) there needs to be as much content online as there is on traditional television.

As it turns out, watching television online can be very simple. MLB.TV and Netflix are both easily accessible with the right device, but the content is still limited. Yes, it’s possible to cobble together an evening of Internet television (particularly if you’re willing to do it illegally) but who wants to be monkeying around with URLs and PayPal accounts when you can just turn on a regular TV to get your daily five-hour-a-day fix of television?

So until more content is available online, we can expect the Cross Platform Report to be valuable, but not that ground-breaking. Which should be a relief to the television industry.

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3 comments on "The More Things Change, The More They Remain The Same".

1. Douglas Ferguson from College of Charleston
   

   commented on: May 8, 2012 at 1:01 p.m.
   If the picture is really so rosy, then we should expect valuations of local broadcast properties to be at an all-time high. But they were off 20% in January 2011 and off 32% this year. As for the DVRs now in half of all homes, I highly doubt that the same-day time-shifting shows are being viewed without skipping over the ads. I am reminded of the guy who has just fallen off a tall building remarking as he passes the 20th floor, "so far so good." This essay seems to be whistling in the dark.
2. John Schmuhl from Advent Marketing LLC
   

   commented on: May 8, 2012 at 7:41 p.m.
   I've read the latest Nielsen report, but there must be something wrong with this picture! If only 8% of viewing is timeshifted and most of that occurs the same day, how do you square the Nielsen first-telecast numbers with their C7 report? For many primetime shows the added audience over 7 days is as much as 40 percent. Nielsen's timeshifting data has never tracked with other researchers. Our fave is the Morpace report. They looked at timeshifting carefully and said that 59 percent of 18-34 viewers prefer to timeshift, while 49 percent of 35-54's do also (2011 data). Network programmers quip that the 10PM hour has become "playback time." Apparently the non-live viewing really peaks in this hour. Things aren't the way they've always been. The Trojan Horse is the combination of tablets, connected TV's, game consoles and PC viewing. They have one thing in common - they facilitate "watch what I want, when I want, where I want" behavior. Viewers have wanted to watch TV this way for a decade and now, every day, they're embracing technology and programming options that make it possible to view television conveniently. It's not about the device or the technology, it's about watching TV their way. The research we read predicts that the number of "connected homes," which would include households with IP-enabled TV's, tablets, IPTV appliances (Roku, etc.), game consoles and Blu-Ray players will surpass cable HH next year and equal MVPD households the following year. The linear television industry understands there's no comfort here. Why do you think Comcast spent so much money on Xfinity? Viewers already cobble together almost as many hours of non-linear viewing as they do good ol' linear. And the movement is in the non-linear direction. Content owners know these trends, too. You can expect more and more quality programming to be offered the way viewers want it - that's where the money is!
3. Kathy Yager from Creative Alliance
   

   commented on: May 9, 2012 at 8:44 a.m.
   Interesting report, and naturally people will read into it according to their self-interests. Bit of a disconnect on decades of increased viewership and the aging of the Boomers though. Barely a year and a half of Boomers have made it to 65, the last couple years are still within "18-49." The economy might be dampening alternative entertainment and Boomers are not their parents. The Silent Generation was the first to have tv as an option, their viewing habits not necessarily predictive. Be wary of the easy answers.

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