The End of Television

New figures from industry regulator Ofcom confirm the decline in TV viewing as we know it – especially among young audiences

Something strange is happening to TV.  And the brand advertisers who, since the birth of ITV in the 1950s, have supported it, are beginning to notice. People are watching less TV. Young people are watching dramatically less, and children according to some reports, none at all.

It’s a curious phenomenon: we first blogged about it in March 2015, though to listen to some in the TV industry, it’s not happening at all. “TV’s unique ability to deliver huge audience figures in a short space of time [makes it the] most effective type of advertising around.” trumpets Thinkbox, the marketing body for the TV industry, before adding “TV accounts for 48% of the average person’s chosen media day”.  Many executives sigh that excitable neophytes have been predicting the death of the TV ad for the last 15 years since the emergence of TiVo.

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Yet new figures from Ofcom, the UK’s industry regulator make clear the new drop in viewership – among all age groups

It’s not that we’re falling out of love with the moving image- far from it. The decline is in so called “linear TV”;  that is TV that is watched live as broadcast, rather than from a ‘planner’ having been recorded, or from a Video-On-Demand service such as YouTube or Netflix.  And this “linear TV” viewing now makes up just 36% of a 16- 24 year old’s total video consumption. (see second chart below)

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The reason this matters for brands is that the entire $200billion global TV advertising business rests on just one segment of this fragmenting landscape: the purple bit – Live TV interrupted by ad breaks.    Until recently, TV ad spending by brands appeared remarkably resilient – rising by around 4%pa in the US in the years up to 2015.

But in recent months Viacom, 21st Century Fox, Comcast, which owns NBCUniversal, and Walt Disney have all reported lower advertising revenues for some or all of their networks. Todd Juenger, senior analyst with Bernstein Research, called the ratings declines “alarming” and “unprecedented”.

BCG, a consultancy, notes that over 50% of all video viewing is already in ad free or “ad light” formats and wonders if,  “with such extensive access to uninterrupted, ad-free viewing, it’s reasonable to ask whether consumers are gradually becoming less tolerant of the ad-interrupted model.”
While the TV industry responds to what is, at best,  a challenge, and at worst an existential threat, brands should review carefully the portion of their ad budgets allocated to live TV as opposed to other forms of engaging video content.  The moving image is far from dead. But the way young consumers watch it has already changed forever.

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