Look at TV consumption habits across the world at the moment and it’s clear that linear TV still rules the roost. On average, our research reveals that Internet users are now watching it for about 2.5 hours each day. That’s a figure that has barely changed since 2012 and which shows that traditional TV viewing habits are not being abandoned.
Where we are seeing changes is in share of TV time devoted to online content. Overall, daily viewing of online TV has climbed from an average of about 35 minutes in 2012 to 45 minutes in 2015, while that sort of increase might not sound dramatic, it means that online TV now accounts for 23% of all viewing time, compared to 19% back in 2012.
Demographic trends are key here. It’s not just that linear TV viewing increases in line with age, it’s that 16-34 viewers are the only age group currently watching more than an hour of online TV per day. Indeed, 16-24 viewers in countries like Ireland and China now watch more television online than via linear formats. It might be a closely fought battle in these markets, but that online has already moved ahead for these younger consumers is extremely important, especially as other countries like Canada and France are close to seeing the same transition take place too.
As online viewing continues to increase in importance over the coming years, the BBC is in an ideal place to capitalise. The iPlayer might be funded by the UK licence fee -- thus why its content is geo-restricted to be viewable only by those based in the country -- but our research makes it abundantly clear that the service has a substantial global audience (with between 1% and 8% of internet users in all 33 of the other markets we survey saying they have recently used iPlayer).
Some of these non-UK-based viewers will have been using the corporation’s now defunct global version of iPlayer, whereas others have turned to less official streaming or content services. But by far the most common tactic used to overcome the iPlayer’s geo-restrictions is to deploy a Virtual Private Network (VPN) or Proxy Server; by using tools like this, digital consumers can connect to a server based in a different country in order to disguise their current location. Thus, use a UK-based VPN from abroad and the iPlayer service will believe that the user in question is British.
Although VPNs are still considered by many to be relatively niche, our research reveals that a quarter of online adults globally have used one -- with this figure then rising substantially in many rapid-growth markets. It’s hardly a coincidence that VPN is most common in places like Indonesia, Thailand and China -- markets where homegrown online content tends to be less readily available and where VPN users say their primary motivation for connecting to the Web in this way is to access better entertainment content not found in their own country. In short, these are content-hungry users who know how to play the system in order to access shows they want to watch.
From a content provider’s perspective, it’s easy to understand why this trend can provoke concern. After all, VPN usage means that tens of millions of people can be using your service without you knowing exactly who they are. But rather than seeing VPN users as a threat, we should be looking at this as an opportunity.
Particularly key here is that VPN users are more likely than the average person to pay for digital content. Certainly, some will be looking to obtain content for free. But for many, the greater motivation is accessing better shows. In short, it’s a question of supply simply not meeting demand. Seen in this light, there’s actually a huge opportunity here for the BBC. Among those accessing iPlayer from outside of the UK (who we estimate to represent about 65 million people), some 75% of them are currently subscribing to a pay-TV service (peaking at over 90% in Latin America). What’s more, 43% of them have recently paid for a TV or film download and 39% for a TV/film streaming service. In all cases, that puts them considerably ahead of average.
Naturally, not all of these users would be willing to pay for iPlayer (especially as they have so far been using it for free). So if the BBC looked to monetise these individuals, many of them would fall off the radar. Even so, the size of the opportunity for the BBC is substantial: it has immensely popular exports such as Doctor Who, Sherlock and Top Gear coupled with a significant global audience which is amenable to the notion of paying for shows.
As the corporation looks to absorb the cost of funding licence fees for over-75s in the UK, and as online TV viewership continues to increase in the years ahead, the scope to develop a global iPlayer as a new revenue stream is considerable.