TV future is cumulative, not replacement

Larry Gerbrandt finds parallels between the development of the aviation and television industries.

I spent several summers working my way through college in a fruit-canning plant where my grandfather was a manager. During one of our evening conversations, it dawned on me that he had witnessed the entire evolution of aviation, from the Wright Brothers in Kitty Hawk to the Apollo landings on the moon (this was back in 1970).

It gave him a certain unique perspective on how technology could evolve in a single lifetime that I could only read about. He had lived it. Now a grandfather myself, I realise that I have witnessed a similar evolution, from an 8” black and white TV set to watching HD video delivered simultaneously to a 60-inch plasma TV screen by direct satellite transmission (enabled by the technology that put men on the moon) to the portable iPad and now Google Glass, which in theory means being able to watch (and record) video anywhere there is a broadband connection.

f I could distil both my grandfather’s perspective on transportation and my own on video consumption it would be that technological advances are more cumulative than replacement. We added flying by plane and soon, thanks to Richard Branson, travelling by rocket, to our transportation options. With video, while there have been format changes (colour and now HDTV supplanted B&W, and DVD/BluRay have largely supplanted VHS) we have incorporated these new technologies into our daily routines.

The latest Nielsen data on US video consumption supports this observation – despite the fear-mongering of the OTT (over-the-top television) fanboys. The impact of new video delivery schemes has largely been to expand the time and place of consumption and has not taken US viewers away from their beloved large screen TVs in the living room.

In fact between 4Q11 and 4Q12, watching traditional TV actually hit an all-time high: 156 hours, 24 minutes a month among all users age 2+, up more than three hours a month. Watching time shifted TV was up nearly an hour a month, a trend that shows signs of accelerating as DVRs are incorporated into more set top boxes.

The only delivery platform showing significant erosion is video watched using a dedicated DVD or BluRay player, a phenomenon that has been occurring since at least 2008 and can largely be attributed to the ability to watch movies and TV series delivered via broadband to TV sets, computers and now mobile devices without the need to buy or rent physical media. In fact, in 4Q12 the consumption of video just on mobile phones (5 hours, 23 minutes per month) nearly eclipsed that of watching on DVD/BluRay devices (5 hours, 39 minutes) in the average US TV household.

What the data doesn’t fully show is that prime time viewing of traditional broadcast live television (the traditional Big Four networks of ABC, CBS, Fox and NBC) is at an all-time low and dropping. The viewing is being spread over more platforms (with basic networks being the biggest beneficiary), more time-shifting and increasingly ‘binge viewing’ (watching an entire season of programmes in one or two sittings) using a combination of services such as Netflix, Amazon Unbox and Apple iTune Store.

Technology may even provide a means for broadcasters to get some of their live viewers back: live streaming to smartphones, tablets and even next-gen devices such as Google Glass. The key is that viewers will get the ability to access these live streams by subscribing to traditional cable/telco/satellite video distributors who are in turn paying broadcasters increasing amounts of retransmission consent fees to maintain their exclusive right to air the content live.

 

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