A new breed of media? Report on TV myths & truths
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Survey by GFK A new breed of media? Report on TV myths & truths
Foreword
It has been predicted that the TV industry will change significantly due to the arrival
of new devices such as smart TV, connected TV, smartphones and tablets. Indeed,
many have predicted that traditional TV will be displaced from its pre-eminent
position thanks to the rise of portable devices delivering digital content, as well as the
increase in savvy consumers and anytime/anywhere content.
So where does the future lie for the TV industry? Should broadcasters be worried that
traditional TV is going to be assigned to the history books? Should advertisers give up
promoting products on TV? Will the consumer give up his love affair with the TV in
favour other, newer devices?
We have conducted research into these challenging questions. To do this we surveyed
consumers in the Netherlands using a questionnaire jointly developed by Deloitte,
Paul van Niekerk from GfK and Michel van der Voort from SPOT. We also spoke to
advertisers, media buyers, broadcasters and content producers to understand their
perspectives as they adapt to the digital revolution and deal with a global economic
slowdown. Our research focused on two key areas:
• the change of consumer behaviour with respect to their consumption of TV
content, and
• the response of the players in the TV value chain to these changes.
It’s an exciting time to be part of the ever-evolving media industry. We, as members
of the Deloitte TMT team, are pleased to present you with our view on the TV
industry’s future.
The results may surprise you.
Daan Witteveen & Marieke van der Donk
2Content
Introduction to the report 4
Myth 1: TV is no longer relevant 5
Myth 2: New devices will destroy television as we know it today 8
Myth 3: Social media is more influential than TV 17
Myth 4: Advertising on TV will decline 23
Myth 5: Content wants to be free 30
A new breed of media: Deloitte perspective on the future of TV 38
Appendix: Research Description 45
A new breed of media? Report on TV myths & truths 3Introduction to the report
Today’s consumer lives in the golden age of media the impact of these technological shifts on the TV
consumption. He has an incredible amount of media eco-system, including the impact on future business
at his fingertips, which he is able to access with models of TV value chain players.
increasing ease through an ever-widening array of
technologies and devices. Media consumption for the To produce this report, Deloitte/GfK conducted an
average European is forecast to continue rising to an online survey of 2,000 consumers in the Netherlands
astonishing 92 hours a week in 2020. While this does and interviewed key opinion leaders. We also used
include overlap, the importance of media in the life of findings from a similar survey carried out annually in
today’s consumer cannot be understated. the United Kingdom by Deloitte/ GfK. These results
were supplemented with research from industry
Many futurists have been quick to write the epitaph of reports, annual reports, analysts’ reviews and our own
traditional media due to the rise of new media, but the experience. For details of our survey methodology,
graph below shows the impact on TV so far has been please see the appendix on the research description.
limited.
The bottom line of the study is this: despite the
This report examines the impact of new technologies explosion in new media forms and the rise of new
and new devices on television-related behaviour and devices and technologies, TV remains first among
the resulting impact on advertising and consumer equals in the media world. No other media type is able
willingness to pay. It does this by examining and to attract the vast numbers of people that television
dispelling common myths related to the TV industry, can.
and by taking a fact-based approach to explaining
Figure 1 Number of hours per week spent per media type 1
90 Internet
Digital TV
Analogue TV
75
Games
Wirelesss
Outdoor media
60
Digital Radio
Analogue Radio
45 Cinema
Print
30
15
0
1900 1920 1940 1960 1980 2000 2020
4Myth 1: TV is no longer relevant
People are watching more TV than ever before It seems that TV is leading rather than following social
Contrary to popular belief, the Dutch are watching media, and social network conversations are often
more TV than ever before. In fact, the average Dutch fuelled by the latest TV shows. The Facebook page of
person now watches 191 minutes of TV every day, ‘The Voice’ in the US has above 3 million followers.
spending 1/5th of every waking hour watching More than 15,000 tweets were sent every second
television. This number has actually increased by five when Spain scored a goal during the Euro Cup final in
minutes in total in the last five years.2 In the UK, this 20129, largely by people watching the live match on
number is even higher. There, people watch TV for 242 TV, we presume. TV is a critical part of the end-of-day
minutes per day3, an increase of more than 20 minutes relaxation routine for most. Nearly 60% of participants
since 2003.4 In the US, the total number of daily in the Deloitte/GfK study on TV behaviour felt that TV
minutes spent watching TV is 283.5 was the best way to relax at home.
TV remains the prime driver and binder of national TV also continues to drive content creation in other
passion during mega events. For example, sport media sectors. TV listing magazines remain incredibly
events continue to attract record viewers. Despite popular in the Netherlands. Veronica Magazine, for
the Netherlands not making it to the finals, over example, has a circulation of 802,599, reaching 2.5
5 million Dutch people tuned in to watch the final of million readers.10 TV talent shows continue to be the
the European Championship between Spain and Italy birthplace of a large number of new music stars. TV
in 2012.6 This number was much higher for the World remains critical for brand building, and viewers reveal
Cup final in 2010 between The Netherlands and Spain, that TV advertisements have the greatest impact on
when more than 8.5 million viewers saw the Dutch them, according to the Deloitte/GfK survey.
team lose the final.7
Even in today’s age of multiple information sources, TV
Meanwhile, the popularity of reality shows in the continues to have a huge ability to frame a society’s
Netherlands remains at an all-time high. The last season opinion. The Deloitte/GfK survey in the Netherlands
of ‘The Voice of Holland’, a popular TV singing contest, shows that 62% of respondents feel that “of all the
was watched by over 3 million viewers on average. The media types, television has the greatest power to
final of ‘Boer zoekt Vrouw’ (Farmer seeks a Wife) was change the way people think”.
watched by over 5.3 million viewers.8
Figure 2 Number of minutes TV watched the day per age segment (average minutes per day)12
257 263
266
254 255
222 232
237
225 225
183 188 184 191
160 166 184 180 182 186 184 191
167 159 162
112 116 112
116 113 116 122 112113118
6-12 13-19 20-34 35-49 50-64 65+ Average
2007 2008 2009 2010 2011
A new breed of media? Report on TV myths & truths 5At the same time, people appear willing to spend is likely to increase the uptake of TV consumption,
even more on television. The average monthly TV especially among younger, technology-friendly
subscription has gone up from €19.87 in 2007 to audiences. Easy access means that viewers will be
€23.87 in 2011, a 20% increase. This number is able to watch TV not only in traditional areas like the
expected to increase even further to approximately living room or bedroom but also in other areas inside
€27 in 2014.11 and outside the house. At the same time, younger
audiences no longer have to go to their desktop
The expectation that multiple media options will cool computers in their bedrooms to surf the net, but can
the attraction of traditional media like TV to younger do it in the living room while watching TV.
audiences has not yet happened in any significant way.
Time spent on TV by children between 6-12 years has While new devices and other technology developments
been flat over the last four years, whereas there has increase the possibility of multitasking, 66% of people
been a net 3% decline for viewers between 13-19 and when watching TV only watch TV. This percentage
20-34. However, time spent by older audiences (50-64 is higher than the single-minded use of other media
and 65+) has increased by 5%. types.
Over the next few years, the increase in the number of
portable connected devices, the proliferation of second
screens and the easy access to on-the-go services
Figure 3 Percentage of time of single-tasking during use of media (%)13
TV 66
Gaming (computer) 51
Magazine 43
Paper 34
Call/Text (fixed) 29
Surfing the web 28
E-mail 28
Social Media 18
Call/Text mobile 8
Radio 3
0 15 30 45 60 75
6Nearly half the country “cannot imagine life
without TV” Conclusion: Despite new developments in the
Of the respondents surveyed, 45% agreed with the media world, television remains a highly relevant
statement “I cannot imagine life without television”. and growing market. Consumers are still in love
This outcome shows how strongly people value with the TV, which means players in the TV value
watching TV and what a big role it plays in people’s chain, including content producers, broadcasters,
lives. Females agree more strongly than males at 48% cable companies and device manufacturers, are
and 42% respectively. In the Deloitte/GFK study in looking to grab a bigger share of the pie. The entry
the UK, the number was even higher; 55% of the of global technology giants like Google and Apple
entire sample agreed with this statement14. The UK into this industry is further testimony to televisions’
respondents also feel that watching TV brings the long-term attractiveness to consumers.
family together much stronger than the NL respondents
across all ages. For example, nearly 55% of the people
between 35 and 44 agree with this statement in UK Figure 4 “I cannot live without television” (category, %)17
while in NL approximately 32% agrees.15 16
Total Gender
In a world where the mobile phone is becoming more Disagree
and more indispensable, it may be surprising to learn Indifferent
32%
32% 29%
29%
that more than 1 in 3 people would be willing to give 36%
36% Agree
up their phone two keep their TV. The survey shows
that 35% of respondents would rather keep their
24%
television than their mobile. 23%
22%
TV market the new battleground for technology
giants
The TV market has recently captured a lot of attention 45% 48%
42%
from non-traditional players like Apple and Google.
In the Netherlands, Google has recently launched
Google TV, and Sony18 is expected to partner Apple in
the Netherlands. The entry of left field competition is Total Male Female
expected to force TV manufacturers and producers of
TV interfaces to focus on usability19, and many analysts
expect TV to become the next digital battleground.20
A new breed of media? Report on TV myths & truths 7Myth 2: New devices will destroy
television as we know it today
networks, Internet TV and the Internet itself have had
little impact on the amount and manner of television
The reports of my death have consumption.
been greatly exaggerated Consumers still largely rely on TV schedules (66% on TV
screens and 56% in newspapers/magazines) and trailers
Mark Twain on television (80%) for a majority of their TV viewing,
while the growth of torrent sites has not adversely
The news media loves to report on new devices and affected the TV market in the same way it has affected
disruptive new technologies. Super set-top boxes, the music market.
private video recorders (PVRs), connected TVs, 3D TVs,
tablets, over-the-top devices – all have been predicted
to significantly change TV consumption patterns and,
consequently, the business models of players. By 2016, “The challenge for TV
analysts have predicted that there will be 1.8 billion moving forward is to
connected TV devices globally.
maintain its position as a
However, these purported threats have mostly not primary activity”
materialised. Relative to initial expectations, digital TV,
the personal video recorder, video-on-demand, social Dan Ligtvoet, EVP & MD Viacom International
Media Networks, Northern Europe
Figure 5 Connected TV devices globally (billion)21
2,0
1,80
0,05 Media-streaming devices
0,25 Hybrid set-top box
1,5
0,25 Games console
1,25
0,35 Connected Blu-ray player
1,0 0,93
0,74
0,50
0,5
0,36 0,90 Connected TV
0,0
2011 2012 2013 2014 2015 2016
8Figure 6 “How do you find out about new TV programmes which you want to watch” (category, %)22
Browsing the listings on TV screen 23 43 32 2
Browsing the listings in
newspapers / magazines 19 37 41 2
Seeing trailers on television
18 62 17 2
within the broadcast schedule
Recommendation by a friend 8 63 27 2
Recommendation in a
newspaper / magazine 5 42 50 2
Browsing the shows in broadcasters
3 23 70 4
on-demand services
Recommendation on a
3 24 69 4
social networking site
Seeing adverts in
3 40 54 3
newspapers / magazines
Recommendation on
2 32 62 3
a website
Seeing trailers on a
2 18 76 4
broadcasters on-demand services
Seeing adverts online 1 26 69 3
Seeing posters
or billboards 1 26 69 4
0 20 40 60 80 100
often sometimes never don’t know
A new breed of media? Report on TV myths & truths 9More screens mean more TV Figure 7 Adoption of tablets in the Netherlands 23 24
In June 2012, over 6 million people in the Netherlands
owned a smartphone and 2.8 million owned a Tablet ownership (% of people using tablets in NL)
tablet. The number of smartphones has increased by
Ownership of tablet/iPad 23%
600,000 in the last six months, with the number of
tablets increasing by over 1 million in the same period.
Worldwide, tablet sales are predicted to grow by nearly
80% a year, to 326 million tablets sold in 2015. By then,
nearly 1 in 6 people in the world will have a tablet.
14%
More screens do not mean less TV. On the contrary,
6 million smartphones, many with large screens, and
3 million tablets will augment the 12.6 million TV sets
6%
in the Netherlands and increase the opportunity that
people have to watch TV.25
1%
Just as smartphones have revolutionised the mobile
phone experience, so can smartphones and tablets Aug-10 Jun-11 Dec-11 Jun-12
transform the TV experience. In all likelihood, new
devices will mean that people will be able to watch TV Number of tablets in the world (m) 326
outside the traditional lounge and bedroom which is 26
Other WebOS
the so-called ‘TV everywhere experience’. 34
MeeGo QNX 252
Microsoft Android 20
iOS 24 116
178
85
14
104 54
64 23 149
122
11 96
18 69
47
15
2010 2011 2012 2013 2014 2015
Tablets v/s other PCs, in the world (m) 535
482
Tablet PCs
Other PCs 434
390
347 357
52% 61%
27% 41%
18%
95%
82% 73% 59%
48% 39%
2010 2011 2012 2013 2014 2015
10TV still the preferred device to watch Live TV Figure 8 “What device did you use to watch
Today, Live TV is still being mainly consumed in broadcast TV as transmitted live?”26
the traditional way, and a traditional TV is still the
dominant device to watch broadcast TV transmitted
A TV with
live, as indicted by 96% of the respondents. Only 4% of buit-in Other* Not specified
respondents watch Live TV through other devices such internet
access 4% 2%
as laptops, tablets or mobiles. 8%
A likely reason is the quality of services on offer, but
that will improve as the number of free and pay-as- A TV with
a set-top 22%
you-go offerings for mobile TV increases. However, box
bandwidth remains an issue in the short term.
Watching Live TV on mobile devices on current 3G 66%
networks in the Netherlands is not an option; its limited
A regular TV
bandwidth does not yet allow broad streaming. Long (cable/broadcast)
Term Evolution services, marketed as 4G LTE, do allow
this but they are not expected to be launched earlier
than 2013 for the first operator (T-Mobile) and not
earlier than 2014 for other operators (KPN, Vodafone).27
The limited success of mobile TV offerings in the
“In South Korea prime past has much to do with the limitations of mobile
broadcast technology deployed, poor quality handsets
time is now between and tedious subscription plans.28
6pm-7pm when many
people travel from work to These are not the only hurdles to overcome either. One
of the major barriers to adopting Live TV on mobile
home as people watch TV devices, even in advanced markets like the United
on new devices. This may States, is the rights regime. While cable companies have
happen in the Netherlands the rights to retransmit content within a home on other
mobile devices, they usually need to renegotiate rights
in a few years” with content owners should they wish to broadcast
the content on tablets outside the home. Nevertheless,
Ton Schoonderbeek, Regional Leader Benelux after considering the future potential the same Dutch
& Nordics Mindshare operator that quit mobile TV due to technology
limitations has recently re-launched its mobile TV
offering for smartphones, after launching this offering
for tablets and laptops.29
A new breed of media? Report on TV myths & truths 11Catch-up TV becoming popular on mobile Figure 9 “What device did you use to watch
devices catch-up/on demand service?”30
While Live TV is still being consumed in the traditional
manner, new devices like tablets and mobile phones are
Not specified A regular TV
being increasingly used to watch mainly catch-up TV. At (cable/broadcast)
the moment, the traditional TV set is still the dominant 11% 15%
device for watching this type of content, yet 41% of the
respondents indicated they watch catch-up TV on a PC,
laptop, tablet or mobile phone.
A TV with a
13% set-top box
The main drivers behind the rise of catch-up TV on a
mobile device are the increase in storage capacity of
41% 4%
the devices and the easy availability of Wi-Fi access.
A TV with built-in
This, combined with the fact that the Dutch spend Other internet access
more time getting to work than other nationalities
from OECD countries31, means they have more time to
pursue such recreational activities while travelling – a
significant amount of mobile content is watched by
people on the go.
“Because global brands like
Google, Apple, Facebook,
Twitter are dominant in
our lives, we see global
partnerships between these
brands and global operating
companies like Unilever,
Heineken”
Ruud de Langen, CEO Mindshare Netherlands
12Broadcasters dominate the catch-up/on-demand Figure 10 “Which devices do you use to access broadcasters’ on-demand
scene services and with what frequency?”33
Catch-up/on-demand services owned by broadcasters
currently loom large in the TV catch-up market in the Tablet
Netherlands (For example, RTL XL, which includes
RTL gemist, has 10 million visits per month32). In the 8% 7% 8% 5% 6%
Deloitte/GfK survey, 64% of respondents had used
12% 12%
broadcasters’ on-demand services. Unsurprisingly, 15%
these services are more popular among younger people 28% 7% 7%
4%
with higher education levels. The survey also reveals
33%
the leading services; 47% and 22% of respondents
4% 28%
indicated they use Uitzending Gemist and RTL Gemist 37%
respectively. Females use them significantly more than 39%
males. 30%
57%
46%
35% 39%
30%
13-17 18-34 35-49 50-64 65+
years years years years years
Often Rarely Don’t have this device
Sometimes Never
Mobile phone
6% 4% 7% 4%
5%
12% 7%
14%
3% 14%
71%
74%
73%
71%
64%
23%
12% 17%
7% 6%
13-17 18-34 35-49 50-64 65+
years years years years years
Often Rarely Don’t have this device
Sometimes Never
A new breed of media? Report on TV myths & truths 13What about recorded content? Second screens work in harmony with the TV
According to the Dutch Deloitte/GfK survey, two out New devices give us the ability to watch TV, but
of three people in the Netherlands have access to a they also give us a second screen to do other things
PVR or personal video recorder. Of those who have while watching traditional TV. A recent study by
a PVR, 38% record less than an hour a week, while Nielsen noted that 88% of tablet owners and 87% of
20% record between 1-2 hours. The types of content smartphone owners use these devices at the same time
normally recorded are films (56%), drama (26%) and as watching TV.37 Yet analysts report that tablet sales
documentaries (25%). are not going to cannibalise sales of large TVs – 74% of
consumers say they will not change their behaviour in
Figure 11 “What device did you use to watch buying large TVs even after buying a tablet. Moreover,
recorded via a hard disk or other recording 57% indicated that their purchasing of small TV’s will
device?”34 not change after they got a tablet.38
A regular TV
Not specified (cable/broadcast)
14% “...the quality of
the produced video
Other 33%
9% entertainment content in
A TV with
5%
general will improve as
buit-in
internet the second screen becomes
access
more important”
27%
A TV with a Paul Zonderland, Country Manager The Walt
set-top box Disney Company Benelux
From the perspective of TV revenue models, PVR
penetration and associated revenue is of particular The Deloitte/GfK survey found that 62% of respondents
interest. For example, in the Netherlands, cable have, in the month prior to the survey, used a device to
operator UPC offers the PVR option to its premium access the Internet at the same time as watching TV. Of
customers for an additional fee of €4 a month on top this group, 74% used a computer or laptop, 42% used
of the premium TV package. The penetration of HD, a mobile phone and 26% used a tablet computer.
PVR and HD-DVR devices among UPC digital cable
subscribers is 62%.35 UPC’s main competitor, Ziggo, More specifically, 48% of the respondents frequently
offers new customers an interactive HD recorder at a or occasionally browsed the Internet for general
discounted price of €99 euros36, employing a different information while watching TV. Some futurist’s
model. prophesised the increase in the use of the Internet
would decrease the time we spend watching TV.
Indeed, it seems the two can co-exist in harmony.
14Respondents of the Dutch Deloitte/GFK study talk Second screens appear to be employed only or mostly
on the phone while watching TV about as much as for private use. Of the respondents surveyed, 72%
their counterparts from the UK. The Dutch however would not like the content they were viewing on their
browse the internet much less. For general information, computer, tablet or smartphone to be displayed on the
around 65% of the respondents in the UK frequently television screen alongside the programme they are
of occasionally do so compared to 48% in the watching.
Netherlands.
People see the TV as a social experience and, at times,
Less than 40% never browses the internet for a personal experience. Many use a second screen to
information about the program they are watching in find information related to the show that they are
the UK while more than 50% never does this in the watching. An existing example of solutions following
Netherlands. this concept is “Real-time accompany content”, which
serves content and advertising related to what is being
watched using automated content recognition. An
example of this is The Voice app; viewers play a game
by acting as coaches during the live shows. A second
type of solution is “Transmedia storytelling” in which
tablet products are geared toward usage between
episodes which is meant to keep followers engaged.
An example from the US is the USA Network and DC
Comics production of an interactive graphic novel for
the show Burn Notice.40
Figure 12 “How often do you do the following while watching programmes on your television?”39
Talk to other people in the room 50 32 11 7
Browse the internet for
17 31 18 34
general information
Talk on the phone 13 41 31 15
Txt/Message with others who are
10 15 16 59
watching the same program
Communicate with others via the 9 18 18 55
internet about general topics
Browse the internet for information 5 16 27 52
about the program
Communicate with others via the 3 10 17 69
internet about the program
Participate in the program 1 4 13 81
0 20 40 60 80 100
Frequently Occasionally Rarely Never
A new breed of media? Report on TV myths & truths 15Web-connected television available but largely Consumers today want more choice, more control,
unused increased personalisation and enhanced user
In the Deloitte/GfK survey, 11.7% of respondents said experience – but, above all, they value simplicity
they have an Internet-connected television (TV set with and ease of use. Devices offering a well-designed,
built-in Internet access). According to GfK, the share of user-friendly interface are likely to be appreciated
Web TV in the flat-panel TV market was over 60% in the most. Additionally, two-way interaction is more
2012; it is expected to reach 84% in 2013. In the US, likely to be employed using second-screen devices
16% of households are reported to have a connectable alongside the TV, rather than on a large TV screen. Yet,
TV. This is expected to grow to 52%, or 66.8 million people in the Netherlands are not very interested in
households, by 2016.41 new technological products. Two thirds (67%) of the
survey’s respondents mentioned that they are unlikely
The same trend is visible in the number of global or extremely unlikely to look in showrooms or shops for
subscribers for the slightly different IPTV technology. new technology products when they are shopping.46
This is expected to grow at a CAGR (Compound Annual With respect to technological adoption, only 5%
Growth Rate) of 18.1% and more than double the categorise themselves as innovators or early adapters.4
number of subscriptions, from 41 million in 2010 to
93.6 million in 2013 globally.42
Conclusion: Technological developments will
However, while it is evident that connected TVs will reach eventually change the way in which we consume
the majority of European households, the disruptive effect television, as well as the underlying business models.
of connected TVs on consumer behaviour is expected However, this technological innovation will enhance
to be limited. The reasons are twofold. First, there is a TV rather than destroy it as all these developments,
difference between having a connectable TV and using it from the flat-panel TV to 3D production, strengthen
as a connected TV. Factors such as the (non) friendliness the main purpose of TV: delivering world-class audio-
of the remote control, lack of time, lack of technical visual content.
knowledge and even lack of awareness of the possibilities
slow the adoption of fully-connected television.43 Companies need to understand consumer behaviour
since user experience, packaging and pricing will
Second, the nature of TV is not due to change drastically; become the factors that determine success and
it will be delivering world-class audio-visual content to willingness to pay. Rather than adding new features,
consumers for the foreseeable future. Therefore, consumers the players in the value chain will have to focus on
are likely to purchase more of the same content, but in an making access to audio-visual content easier and
easier manner and of better quality, making the most of faster, anywhere and anytime. That will result in
options like VoD and catch-up. This leads to the increasing redefining the roles of value chain participants.
importance of distribution mechanisms, like app stores,
which were present in around 28% of TVs sold in the
Netherlands in December 2011.44 Analysts have noted that,
to develop excellent controls and features, companies need
both ‘breakthrough thinking on uses of semiconductor-
driven technologies, along with a well-designed user
interface to access the consumer’s content.’45
16Myth 3: Social media is more
influential than TV
The arrival of new types of media is not new. People TV outdoes social media in every meaningful
still read newspapers and listen to the radio even way
though both media types have ceded ground to the Today, the total number of hours people in the
television and the Internet in recent years. Many have Netherlands spend watching television is 31 times
argued that the rise of social networks will hurt TV in a greater than the time they spend on Facebook, Hyves
similar or worse way. and Twitter combined. The aggregate number of
television hours each month is 1.499 million compared
Yet rarely does one medium fully replace another. Radio to 48 million on these social mediums combined.
added to live concerts; they didn’t kill them. TV and
radio remain popular – and time spent watching TV Figure 13 TV use versus social media use48
continues to increase despite the rise of the Internet.
The coexistence of different types of leisurely pursuits Aggregate NL consumption of TV and social media
is more common than the substitution of one for the
other.
TV 1.499
Having said that, the rise of social media has put TV Hyves 30
executives in a predicament. Some TV executives worry
about losing viewers to social media sites and in turn Facebook 17
losing audience reach and advertising relevance; some
Twitter 1
fear their programmes are not generating sufficient
social buzz; others are striving to emulate social
0 50 100 1.500
networks’ ability to gather user data.
Hours per month (m)
Average consumption per user
TV 5.921
Hyves 253
Facebook 144
Twitter 21
0 200 400 6000
Minutes per user per month
What’s more, the number of minutes individuals spend
watching TV every month is approximately 14 times
greater than that of the other three combined. The
time individuals spend on social media may be growing
faster than that on television, the aggregate number of
minutes watching TV is increasing faster than that of
social media because it is growing from a much larger
base.
In the UK, the aggregate number of hours people
watch TV is 35 times the number of hours they
spend on Facebook, Twitter and LinkedIn combined.
A new breed of media? Report on TV myths & truths 17Moreover, the average number of minutes spends per Overall, this means TV is still way ahead of social media
user on watching TV is 16 times larger. in terms of scale, effectiveness and attractiveness to
advertisers. As long as there is no medium to replace
Advertising spend much greater on TV than on it, TV will remain unbeaten in reaching and influencing
social networks mass audiences.
Today, ad spend on social media is much lower than
ad spend on television. Estimated advertising revenue Little consensus about TV as a social activity
for all social media sites in the Netherlands’ region is TV has often been described as the original social
less than €50 million.49 In 2011, the amount spent on network. However, do people still consider watching
television was €1.017 billion, which is 20 times larger.50 TV a social activity? If so, does this mean they want
to watch TV together or do they just want to use the
TV advertising grew by 4.3% between 2010 and 2011. activity as a basis for conversation? If the latter is true,
Zenith Optimedia expects it to grow at a compounded do they like to do talk about the programme as it is
annual rate of around 5% between 2011 and 2014, being broadcast or once it has finished? Lastly, what
exceeding the GDP growth forecast by some measure.51 medium do they use to talk about programmes?
Social media ad spend is also expected to grow quickly, but Figure 14 How much do you agree with the
at a much slower pace than previously expected. According following statements about the reasons for
to recent earnings reported by Facebook, its advertising watching TV (%)55 56
earnings grew 28% year on year between Q2’11 and Q2’12,
while this growth was 83% the year before.52 Gartner Watching TV is more enjoyable with others
forecasts that global social media advertising revenue 38
growth will decline from 34.9% in 2012 to 11% in 2016.53
At this pace, social media advertising spend, coming from a 27
much smaller base as it does, is not expected to surpass TV
ad spend in the near future.
17
In addition, the TV market has a much sounder price
9
base compared with social networks. A large number 7
of ads that run on social networks are display ads.
The inventory of such advertising is potentially infinite,
since there is no limit to the amount of ads that can Agree Agree Neither Disagree Disagree
strongly slightly agree slightly strongly
be added, whereas the inventory of TV ads is finite,
nor disagree
especially within the leading networks. Consequently,
the price levels of TV ads are expected to remain strong
in the coming years, whereas the ever-increasing TV is a social activity which brings the family together
inventory of online ads is likely to continue to put 36
pressure of social network prices.
25
TV much better at encouraging people to buy
products
Television also dwarfs social media’s ability to persuade 23
consumers to try new products. Only 2% of 18-34
year olds mentioned Facebook as the source for 12
finding their latest planned purchase. This number 3
was substantially higher for television. Approximately
one in seven respondents in the Deloitte/GfK survey Agree Agree Neither Disagree Disagree
acknowledged they were persuaded by television to strongly slightly agree slightly strongly
make a non-routine purchase.54 nor disagree
18There was no single view on this subject. On one hand, In contrast to interacting with others during the
34% of those taking part in the Deloitte/GfK survey felt transmission of a programme, it seems most people
that watching TV is more enjoyable with others, and prefer discussing TV programmes after watching them,
another 28% agreed that TV is a good social activity perhaps because they find the content compelling. The
that brings the family together. On the other hand, results of the survey show that 39% of respondents,
26% report enjoying TV more when on their own, and more women than men, often talk with others about
37% do not see it as a family-connecting activity. TV programmes they have watched, 34% occasionally
discuss TV programmes after watching, and only 26%
rarely discuss them.
Figure 15 People enjoy talking about TV programmes they watch57 58
“How often do you do the “I often talk to others about the programs I’ve watched on TV ” (category, %)
following while watching
programs on your television?”
Total Gender
7 Never Disagree
11 Rarely 26% 23% Neither agree
29% nor disagree
Agree
32 Occasionally
33%
34%
35%
50 Frequently
39% 43%
36%
Talk to other Total Male Female
people in the room
A new breed of media? Report on TV myths & truths 19Communication remains traditional Television provides the topic of conversation, while
The Deloitte/GfK survey results also show that most social networks, by enabling conversation, amplifies the
people prefer traditional ways of communicating, like appeal of television. The emergence of second screen
talking to people in the same room, phoning or text devices has strengthened this ability to converse since
messaging. A much smaller number of people use the it eliminates the need to walk to the desktop computer
Internet to discuss TV programmes or find information and it enables people to access social networks while
on them, which means that even fewer people use sitting in front of their TV. Another recent survey
social media for the same purpose. reports that 41% of people using a second screen
when watching TV use it for social media, making it
Today, however, over a quarter (27%) of respondents the second most popular activity after surfing on the
sometimes use social media to find out about new Internet (51%).59
programmes to watch on TV. Given the short history
of social media, these statistics show that social The complementary nature of TV and social media
media has become a channel of interaction around implies that parties in the value chain should
TV programmes in a relatively short time. As people co-operate in developing new models to strengthen
share more and more on their social media pages that combination. However, this symbiotic relationship
and social networks substitute traditional messaging has yet to fully take off, at least in the Dutch market.
channels with advanced messaging possibilities, social Nevertheless, if technology and consumer behaviour
media is likely to conquer an element of traditional were aligned, and best practices developed to ensure
communication, enriching it with additional features. optimal integration and usability, the mutual effects of
TV and social media could be improved significantly.
Television and social networks complement each Combining TV with online advertising has already
other but collaboration is still minimal proved effective since it is reported to have raised the
Many broadcasters believe that socialisation clearly reach of TV campaigns when combined effectively.60
enhances traditional TV. People who actually visit
websites or make comments while watching TV
reported that it makes viewing more exciting (72%),
makes viewing richer (63%), makes viewing feel more
like a communal experience (41%) and encourages
them to watch more programmes/of each programme
(14%). Only 26% said that it distracts them from
watching.
Figure 16 Have you interacted with a TV program other than to vote?61
Send in an answer to win a contest/prize 10 Social network
Other
Tweeted a comment 4 No
Entered myself in a competition 4
Posted a comment on a social media site 3
Other 1
No I have not interacted 82
0 10 20 30 40 50 60 70 80 90 100
20Texting still the most popular way to interact The Facebook pages of the most popular Dutch TV
with TV shows programmes confirm survey observations that there is
Just a few years ago, SMS voting was the main way to limited interactivity with TV programmes compared to
interact with TV shows. Today, despite the fact that their national reach: the page of ‘The Voice of Holland’
text messaging is becoming increasingly challenged has only 170k ‘likes’ compared to an average of 2.8
by the rise of a number of free messaging alternatives, million viewers per show. Similarly, the page of Dutch
text voting remains the primary way of interacting soap opera ‘Goede Tijden Slechte Tijden’ has 163k
with TV shows. The survey shows that 1 in 5, that is ‘likes’ versus 1.6 million average viewers per show. The
nearly 20% of the respondents, has texted, while only same is the case for ‘Boer zoekt vrouw’ and ‘Ik hou van
4% have tweeted a comment and only 3% have ever Holland’.
posted a comment on a social media site. The number
of tweets amongst respondents between 13-17 is
however much higher at 18%. The low level of tweets
can be partly explained by the insufficient integration
of social networks with TV shows, but also by the fact
that many people simply like to sit back and watch TV
and cannot be bothered to share their comments. The
integration of social networks can though be a good
tool to engage a younger audience.
Figure 17 Average viewers and likes for Dutch TV shows62
Show Average # of Likes on
viewers per show Facebook
The voice 2.8m 170k
of Holland
Goede Tijden 1.6m 163k
Slechte Tijden
Boer zoekt 3.9m 51k
vrouw
Ik hou van 2.6m 32k
Holland
A new breed of media? Report on TV myths & truths 21Figure 18 Number of tweets related to TV channels in week 33, 201263
Conclusion: Currently, people are spending
Other much more time watching TV than using social
Eurosport media, and advertising spend on TV remains
Nederland 1
and will remain significantly higher. At the same
11%
18% time, social media complements TV as it does
Comedy Central not substitute the experience of watching but
2%
enhances it instead, and this trend is expected to
grow with the introduction of new devices being
used as a second screen.
Nederland 2
8%
MTV 17% Content producers will have to co-operate closely
with content distribution channels if they want to
capitalise on that opportunity. Content owners
6% and broadcasters need to collaborate to provide
Nederland 3
a seamless and user-friendly experience for the
2% consumer.
Veronica 1%
NET 5 15% For advertisers, TV remains the leading instrument
6%
for mass-reach advertising which will not be
SBS 6 3% RTL 4 surpassed by social media. However, it can be
5% 4%
RTL 8 complemented by social media to boost the effect
RTL 7 RTL 5 of TV campaigns.
New entrants and technology companies will have
The average Dutch person may not be tweeting or to focus on providing ultimate usability solutions
commenting regularly during shows, but they are with seamless interfacing and integration with
paying a lot of attention to certain types programmes. social networks, utilising their technical excellence
Typically, live events, sports and youth-oriented content for user experience.
does very well. This explains the fact that channels like
MTV and Eurosport feature more prominently on social
media measurement tools like Remotely.TV’s monitor
of twitter, which notes that ‘Twitter activity around TV
programmes is growing by 120% a year’.64
22Myth 4: Advertising on TV will
decline
Advertising is a major source of income for both new Apart from the rise of Internet advertising, TV is also
and traditional media. Moreover, these media types believed to be facing a threat from new technologies.
compete against each other for the same marketing For instance, many have argued that the increasing
and sales budgets. The rise of online advertising has penetration of personal video recorders will hurt the
made a huge impact on the print advertising share; TV advertising market as consumers can skips ads on
many have argued that it’s only a matter of time before their recorded content. Likewise, the easy availability
TV suffers a similar fate. of pirated content is damaging since pirated shows are
generally available without ads.
One of advertising’s fundamental objectives is to target
specific demographic groups or specific customer
segments. Yet television is a mostly mass-market
medium and, on this basis, TV advertising could be
criticised as wasteful and inefficient, particularly when
compared to the targeted advertising that the Internet
is perceived to deliver.
Figure 19 Relative ad spend development per media type (%) in the Netherlands65
100%
26% Newspapers
31%
46%
75%
61%
66% 12% Magazines
14%
Radio
Cinema
Outdoor
50%
24%
26% TV
23%
19%
25%
24%
26% Internet
19% 22%
15%
7%
0%
’80 ’85 ’90 ’95 ’00 ’05 ’10 ’14
A new breed of media? Report on TV myths & truths 23No serious challenge to TV advertising Figure 20 High impact advertisement types (%)69 70
Despite these challenges, the amount spent on TV
advertising has stayed strong globally. While other Type of favorite advert in past year (%)
traditional media types like newspapers and magazines
have declined, TV is expected to increase its relative
Television 52
share of advertising spend. Over the past decades,
there has been a clear shift in ad spend revenue from Leaflets delivered at door 3
traditional media types to new ones. The relative
amount for TV has however been ever increasing. Radio 1
Newspaper 1
Further, the threat from non-linear substitutes may
be overstated. Non-linear TV service Hulu, which Magazine 1
broadcasts content from the largest TV networks in
the US, ended 2011 with revenues of €323 million66, Video on a website 1
which was less than the revenue made by the Today
Other 2
show on NBC.67 In the Netherlands, total ad revenue
for online video (excluding YouTube) is less than 2% of None 40
TV ad spend.68 Growth rates of online video ads may
be impressive, but their small size means that it will be a 0 10 20 30 40 50 60
long, long time before they can be considered a serious
challenger to TV advertising.
Advertising type with the most impact (%)
Mass reach is the main reason why linear TV remains
so attractive. While non-linear services are gaining Television 55
popularity, their reach is still very fragmented and it
does not allow advertisers to reach targeted audiences Leaflets delivered at door 38
on a large scale.
Newspaper 27
TV advertising good for building brands and
Radio 20
launching products
Some have claimed that the effectiveness of TV Magazines 15
advertising is diminishing because it is too broad-based
and isn’t able to target specific groups in the same way E-mails from companies 10
as the Internet. However, this purported weakness is
Direct mail 8
actually a strength when it comes to brand building
and launching new products, since reaching a wide Posters/Billboards 7
audience is often the main requirement. There is no
substitute for TV which can deliver extensive and Banner/adverts websites 4
powerful campaigns to a wide part of the population in
Internet search engine 4
a short period of time.
Cinema 3
Video adverts websites 2
Banner adverts (mobile) 1
Junk e-mail 0
None 18
0 10 20 30 40 50 60
24The emotional power of TV is underlined by the fact Taking a closer look at the results reveals that television
that 52% of respondents to the Deloitte/GfK survey has the highest impact across all age segments; except
answered “TV” when asked the question “Where for those older than 65. Younger audiences actually
did you see or hear your favourite ad?” The next respond better to TV, improving from 39% in the 65+
most powerful type of ad was, perhaps surprisingly, segment to 70% in the 13-17 years segments. For the
leaflets posted through the letter box, which was the elderly, newspapers and leaflets are very important.
preference of 3% only. In the UK, 84% consumers The Deloitte/GfK study in the UK showed that these
answering the same question believed that their outcomes have been fairly stable since 2009.
favourite campaign was TV based and no other
medium polled more than 2%.71
The inability of non-TV advertising to make an
“As long as I have been
emotional connection with the consumers was such working in media, people
that over 40% of respondents that did not have have been predicting that
a favourite type of advertisement, did not have a
favourite advertisement, and so did not mention a type
the 30 second spot is dying,
of media. which off course has been
proven wrong”
Not only are TV ads able to make the strongest
emotional connection, they are able to persuade
people to go out and buy a product. Nearly 55% of Ruud de Langen, CEO Mindshare Netherlands
survey respondents felt that TV ads had the greatest
impact on them personally. A similar survey done
on consumers in the UK by Deloitte/GfK also had
comparable results. In the UK, TV was in first place by a
wide margin.
Figure 21 Advertising type with the most impact (%)72
Advertising type with the most impact (%)
70
63
58
51
45 44
43 43
39
37
30
28
25
24
21 22 22
18
15 14
12 12 13 13 12
13-17 years 18-34 years 35-49 years 50-64 years 65+
Radio Magazines Newspapers Leaflets Television
A new breed of media? Report on TV myths & truths 25Moreover, despite the power of Internet ads for selling
(versus brand building), respondents to the Deloitte/
GfK survey felt that TV ads had the greatest impact on
their shopping decisions when compared to ads on any
other medium. Ads on TV remain consumer favourites
and have the best ability to encourage people to buy
the product. The impact of TV is high when it comes
to non-routine purchases; 14% of the respondents
discovered the product because they saw it on TV.
Figure 22 Drivers of discovery that lead to purchase of new products and services (%)73
I just came across it in the store 22
A friend/family member recommended it 16
I saw it within a television program 8
I read about it on a website 8
I saw an advert for it in a newspaper 6
I saw an advert for it in a magazine 6
I saw an advert or sponsorship clip for it on televisio 6
I saw an advert on a website 4
I came across it on Facebook 1
I saw a poster for it 1
Other
I came across it on another social network 0 TV
I came across it on twitter 0 Online
Print
Other, please specify: 9
0 5 10 15 20 25
26New devices make target advertising on TV a To begin with, the rising cost of producing a television
possibility commercial makes it less likely that small businesses
Connected devices like mobiles, tablets and gaming with modest marketing budgets (who might want to
devices will eventually support the TV’s ability to target ads to just households in their area) will be able
deliver IP-based campaigns – targeting specific user to advertise on TV. Secondly, delivering targeted ads via
groups. In time, connected TV will enable a change to a set-top box requires boxes with uniform specifications
the advertising model. For example, adverts could be and capabilities which place advertisers with significant
served on a customised basis to each household, with technical hurdles.
TV ads addressed to each household and delivered via
the online connection. We still like skipping the adverts, but
occasionally stop and watch
This could eventually lead to video advertising Not surprisingly, most people who watch pre-recorded
becoming significantly more targeted. To explore the television often skip the adverts. Over 70% of those
opportunity arising from connected devices, Mindshare who make use of PVRs always or frequently avoid
entered into a mobile partnership dubbed “Mobile advertising content. In addition, 43% always or
Garage” with Google.74 frequently do something else during the adverts when
watching pre-recorded television via their PVR.
Another example from the Dutch market is “Ster Extra”.
This app is an interactive second screen service which Yet the increased uptake of PVR services has not
allows the viewer to interact with the commercials. The affected the overall advertising market, as evidenced in
viewer can both learn about the commercials through our findings from the UK. Most people in the UK found
quizzes and making offs, as well as buy or try the that PVRs increased their total TV viewing.76
products directly.
In the Dutch market, many consumers agreed that,
However, the case for highly targeted TV advertising despite watching shows on a PVR, many of them
has not yet been proven. While targeted TV ad stopped to watch ads or trailers that interested them.
campaigns enhanced by technology are certainly Of the survey respondents, 9.1% noted that they did so
attractive in principle, the execution remains the main frequently or always, another 15.7% admitted to doing
challenge. so regularly.77
Figure 23 “When you are watching pre-recorded television via your PVR, how often do you...?”(%)75
...avoid content with adverts ...do something else while the adverts are on?
42
30
26 25
22
17
13
10 11
5
Always Frequently Occasio- Rarely Never Always Frequently Occasio- Rarely Never
nally nally
A new breed of media? Report on TV myths & truths 27No device has the massive reach of TV For online advertising, the number of websites is
There are several reasons why TV ad spend is still practically unlimited and their large inventory creates
alive and kicking and will continue to enjoy a healthy price erosion and a fragmented communication
life: companies need to advertise and TV ads are still channel. TV ad inventory is limited, helping maintain
powerful in building brand awareness and convincing strong prices. The unlimited number of internet pages
people to buy products. As long as advertisers can versus the fixed number of TV channels creates a
maintain the quality of the advertisements and people structural challenge for online advertising. Having
keep watching television, TV will keep its position as a said that, search keyword rates can still rise because
strong advertising channel. one party (Google) has more control over supply and
effectively sets the price.
The advertising revenue for newspapers was disrupted
because online classified listings such as craigslist The mass reach of TV also means that replacing a
and monster.com are near-perfect substitutes (or traditional TV product launch campaign with an online
superior) to a newspaper’s highly profitable classified only campaign would require marketers to employ an
listings section.78 In the Netherlands, the growth of almost unlimited number of websites to ensure same
websites like marktplaats.nl and vacature.nl has been reach as TV.
accompanied by a decline in traditional media (i.e.
newspaper) advertising. Fortunately for the TV, there TV complements online advertising
really is no alternative. No advertising medium is perfect and each medium has
its own strengths. When deeper targeting is needed,
Another important reason for the success of advertisers use Internet-based campaigns. However,
TV advertising was its unbeatable reach. In the different media types can exist alongside and even
Netherlands in 2011, TV reached on average 78.8% enhance each other. So, rather than television or new
of the population older than six years every day.79 TV media, it can be television and new media.
advertising proves extremely effective in bringing an
advertising message to the masses - once a commercial Online and TV provide different but complementary
is scheduled to be showed on TV, it is guaranteed a types of experience. Combining TV and online can
part of the population will actually see it. result in more reach and effectiveness, as the evidence
proves.80 At the same time, television can also help
generate traffic and result in direct sales, as evidenced
“...we recognize that TV by the consumer response to TV advertising. Television
is often a great traffic generator for online campaigns.
has played a very important
part in the success of our
brands in the past; yet TV
must continuously reinvent
itself to ensure that it
remains equally relevant in
the future”
Harry Dekker, Media Director, Unilever Benelux
28Figure 24 Time spent vs. Share of advertising spend TV still has room to grow
(2011)81 Considering the ratio of time spent and advertising
income on different mediums, it becomes apparent that
= Indicative direction TV clearly receives less than its fair share of advertising
and speed revenue. Newspapers and magazines are likely to
50 continue to decline as their share of the time spent
on it and ad spend that it receives both continue to
decline. Online does quite well and is likely to continue
40 to improve as time spent and ad spend both increase.
Newspaper Television is also structurally well placed to improve as
Share of Advertising(%)
time spent and ad spend could both increase.
30
Conclusion: Although online is gaining a strong
Internet TV
20 position, TV remains the strongest medium with
Magazine
its mass reach. TV advertisement spending is
expected to grow and the medium term outlook
10 remains positive. As long as there is no alternative
Radio with the same reach, TV advertising is here to stay.
0 Moreover, the steady growth of online advertising
0 10 20 30 40 50 can be further leveraged to amplify the
Time spend (%) effectiveness of both TV and online advertising
when combined. The different natures of TV
(visual) and online (textual and visual) are likely
to be further combined to realise the power of a
multi-channel approach.
Over time, TV and online (video) will move
towards each other. TV will be enabled by
connected devices and online video will enter the
TV, resulting in a hybrid landscape with the best of
both worlds.
A new breed of media? Report on TV myths & truths 29Myth 5: Content wants to be free
Watching TV is actually cheaper than almost any other While many believe the Netherlands has an
leisure activity. The average monthly amount paid for underdeveloped pay TV market, the amount people in
TV per household was around €23 in the Netherlands the Netherlands that pay for TV is comparable to other
in 2010. Given the number of minutes people watch developed countries with similar GDP levels per capita.
TV per day and the amount they pay, watching an Figure 25 shows that the amount paid per hour is a
hour of TV costs approximately 6 cents an hour in the linear function of the subscription revenue per head per
Netherlands. Compare that to a movie ticket, which year.
costs around €10 for two hours, a music concert, which
costs €15 for two hours, a restaurant visit, which could
set you back €30 a person, or even a visit to the gym.
Figure 25 TV Subscription revenue per head per year vs revenue per hour (€), 2010, Netherlands82
0,15
0,12 USA
Subscription revenue per hour (€)
0,09 SWE iRL
AUS
FR
0,06 NED
CAN UK
GER
0,03
ITA Bubble size = avg. # of
CHN
BRA POL minutes per day (200)
ESP
IND
0,00
0 20 40 60 80 100 200 220 240
Subscription revenue per head (€)
30The willingness to pay for TV increases
Consumer willingness to pay for traditional (linear)
TV has actually increased over time, despite the
tremendous increase in bandwidth, the ubiquity of
mobile devices and the proliferation of file sharing sites.
There is evidence of this not only in the Netherlands
but also in more advanced TV markets like the United
States, where TV subscription spend has increased from
€41 billion in 2005 to €104.5 billion in 2010.83
Since 2005, TV subscription spend in the Netherlands
has increased at a much faster rate than nominal GDP
and advertising spend. The question is: what is driving
the willingness to pay and how can different parties in
the TV value chain improve this even further?
For content producers and cable companies, the four
most relevant tools for increasing the willingness to pay
for television are (1) better content, (2) more content,
and the (3) technical features and the (4) availability on
devices.
Figure 26 Advertising and TV subscription spend compared to GDP (indexed)84
175 Advertising Spend
164 Subscription Spend
Nominal GDP
150
127
125
119
100 100
75
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
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