Main TV viewing time falling as tablet, VoD take over

Friday 30 December 2016 | 15:54 CET | Market Commentary

The big TV in the living room is losing ground, according to an analysis of viewing figures by Telecompaper. Average daily viewing time in the Netherlands has been falling since the first half of 2015, and with an annual drop of 4.0 percent to 194 minutes in November 2016, this can clearly be considered a downward trend. Few should be surprised given how tablets have established themselves as 'second screen' in the home. 

The regular reports from the Dutch ratings agency SKO provide monthly overviews of viewing time on the main TV in the living room. This covers not only live TV but also VoD and other forms of delayed viewing. Taking account of major events, such as World Cup and Euro football, the Olympics and exceptional weather, we see viewing time increasing up until January 2015. Then months of decline set in, although these may be ascribed to exceptional events in the previous year, such as the Winter games in February 2014 and the World Cup in June 2014. Viewing time was stable on an annual basis in May 2015, only to fall steadily each month from July 2015, excluding only months with big events, such as the Euro in June 2016 and Olympics in August 2016. September showed a strong dip of 9.9 percent, likely due to the unusually warm weather. 


For pay-TV providers and broadcasters, this is not a a priori negative. They are largely indifferent to which screen consumers choose, as long as they remain subscribers and keep watching. Our quarterly Dutch Television Subscribers report shows that the number of subscribers is falling, but much more slowly than the viewing time.

Operators: adequate defence

With the introduction of TV Everywhere apps, the pay-TV providers have responded adequately to the rise of the tablet and smartphone as second screens, following the changing behaviour of their customers. The response has also included adding competing apps to their TV platforms, as KPN and now Ziggo is doing with Netflix. This can be seen as a way to pre-empt cord-cutting, allowing customers to watch these services not only on their mobile devices but also over the main TV. Complete on-demand consumption, even as binge-viewing if so desired, is something that is still only very partially supported by the operators and broadcasters.

A downside is that TVE apps place traditional TV in the role of "just another app", alongside other video providers (YouTube, Netflix, Wuaki, Pathé Thuis, Vimeo, etc.). At the same time NPO.nl is offering access to all its content free, and NLziet plans to develop in 2017 into an online alternative to traditional TV subscriptions. It's no wonder that interest in broadband-only plans is growing.

The demise of traditional TV has long been expected, but it's going through a long, slow death, similar to the LP, SMS, fixed line and newspapers. The internet is the new distribution channel, and TV subscriptions won't avoid this. The operators are defending themselves with TVE apps, rebundling OTT apps, bundling TV in attractive multiplays and offering unique content (Ziggo Sport, KPN Presenteert). They even still have the pricing power to raise rates. In the long term though, the focus is more on the broadband market and less on TV.

Broadcasters: NLziet

The challenge for broadcasters in 2017 is to facilitate viewers more in their desire to consume content on-demand or in binge sessions. The planned update of the NLziet platform can realise this. If it works, the broadcasters NPO, RTL and SBS will strengthen their market lead over the smaller players (Viacom, Disney, Discovery, Fox). If Hulu is any example, we can expect the Dutch platform to evolve further, such as commissioning its own original content, adding other broadcasters, joining the offerings of pay-TV providers and developing new subscription formats. 

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