How has UK Television Viewing Behaviour Changed Since the 1980s? Insights for the Australian Market. Virginia Beal, University of South Australia

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1 How has UK Television Viewing Behaviour Changed Since the 1980s? Insights for the Australian Market Virginia Beal, University of South Australia Abstract This paper concerns changes in television viewing behaviour in the UK over the last 20 years. The specific impact of cable/satellite television is examined by replicating Barwise and Ehrenbergs (1984) research conducted in the early 1980s. The new research found that channel proliferation has led to audience fragmentation (i.e. viewing spread over more channels) but not strong audience segmentation (i.e. different channels delivering different types of viewers). This finding has two major implications 1) that viewing in Australia would follow a similar pattern should the penetration of cable/satellite increase with the introduction of digital TV, and 2) the absence of true niche channels suggests that cable/satellite TV should be considered in much the same way as free-to-air channels, just smaller, not as highly specialised avenues for reaching desirable demographics, with few exceptions. Acknowledgements: the author would like to acknowledge the assistance, advice and valuable feedback provided by Prof s Patrick Barwise, Matin Collins, Andrew Ehrenberg and Gerald Goodhardt. Introduction It has been suggested that the advertising world is entering an Age of Media (Admap, 2000). The arguments are already familiar and well-aired: a proliferation of media choices, new and old; the fragmentation of the mass market into ever smaller niches and sub-segments; the plethora of communication messages. These have been said to be placing pressure on media planners and buyers to identify the precise spots at which they can effectively deliver a message to the target consumer. This increased focus on media has spawned many new trends in media analysis, scheduling and buying practices. Although this trend encompasses all media (i.e. newspaper, magazine, TV, internet, outdoor etc) TV is perhaps the most important as it is the primary (dollar) media for most advertisers, accounting for 32% of advertising spend in the UK or some 3.9 billion and 38% in Australia ($1.18 billion) in 2000 (Source: WARC 2002). Dollar value aside, the TV industry is also being looked upon with increased uncertainty at this time mainly due to the introduction of digital TV, advertisers and clients alike are asking What does this mean for us?, Will it change the way we do business?. In an attempt to find some clues to answer these questions this research looks at TV viewing behaviour in the UK, which is a far more advanced market than Australia in terms of cable and satellite TV penetration and digital TV services. The rationale being that it may hold insights that can be applied to the Australian TV market should it develop in a similar way. Past and present patterns of viewing are examined to gauge the effect of vastly increased channel choice and the impact upon marketing communications strategy is considered. In the interests of brevity however, the effect of interactive TV is not developed in this paper Aim and Purpose As the initial step in this enquiry the paper replicates one aspect of the TV viewing research conducted by Barwise and Ehrenberg (1984) in order to test their hypothesis about the nature ANZMAC 2002 Conference Proceedings 2631

2 of future TV viewing behaviour. Their research explored viewers channel choice behaviour, during the mid-1970s until the early-1980s in the UK and USA, by considering three different aspects of TV channel popularity: (i) channel share: the percentage of total TV viewing devoted to that channel; (ii) channel reach: the percentage of people who view the channel at least once in the analysis period (e.g. a week); and (iii) the average hours per viewer: how much those who do view the channel watch it during the analysis period. The TV landscape at the time was different to what we see today, with just four free-to-air channels available in the UK (BBC1 and 2, ITV and Ch4). In the UK today 5 free-to-air terrestrial channels are available and over 10 million homes (2001, Source: BARB) subscribe to cable or satellite TV (referred to as multi-channel homes ) giving them the ability to choose from more than 250 channels (number dependent on subscription package, most basic package contain approximately 65 channels) (The Economist, 2001). Contrary to the view of industry commentators Barwise and Ehrenberg speculated that the TV revolution (i.e. introduction of VCR s, channel proliferation, cable and satellite TV etc.), which is now well and truly upon us, would not dramatically alter the pattern of TV viewing they found. They felt that TV would remain a mass-entertainment medium rather than morphing into special-interest channels, each with its own loyal, largely non-overlapping audience (1984), the following research tests this hypothesis. In addition, the analysis also looks at the profile of each channel s audience and the share of viewing they attract. The Data Analysed The findings are based on analyses of UK viewing records collected by BARB in The people-meter panel contained a sample of 11,961 individuals able to receive the five terrestrial channels (BBC1, BBC2, ITV, Ch4 and Ch5). Forty six percent of the panel could receive cable or satellite TV in either digital or analogue format. The data was analysed using Taylor Nelson Sofres InfoSysTV software. Results: Overview The findings of this study indicate that channel proliferation has led to audience fragmentation but not strongly segmented audiences, despite the fact that most cable/satellite channels show only one programme type (eg sport, news, or movies). This supports the hypothesis proposed by Barwise and Ehrenberg. The pattern of viewing they observed in the 1980s and earlier continues to hold. Importantly changes that have been created due to channel proliferation are immediately apparent when using the past research as a frame of reference. This alone reinforces the importance of empirical studies and replication. Audience Fragmentation Graph 1 is used to illustrates several important points. It shows the weekly reach (amongst those that were able to receive the channel) of the 5 terrestrial and 27 of the cable/satellite channels plotted against the average weekly hours spent per viewer watching the channel. It is important to keep in mind that the average adult spent just over 25 hours per week watching TV in 2001, so any one channel accounts for a relatively small proportion (from 2% to 30%) of total viewing time. ANZMAC 2002 Conference Proceedings 2632

3 Firstly, the pattern of channel reach and hours per viewer reported by Barwise and Ehrenberg (1984) is clearly evident. They found that for different TV channels available in a given market their reach in a week and the hours spent per viewer varied together in a systematic way. Small channels clearly suffer from McPhee s Law of Double Jeopardy (McPhee, 1963). This is a widely established relationship which says that, in a choice situation, the items with a small share suffer in two ways: (a) relatively few people choose them, and (b) even those that do, do not use them that much. For TV channels this means that those with small share are watched by fewer people and those few that do watch them do so relatively less. The relationship was summarised quantitatively using the following heuristic formula: Average weekly Hours per viewer weekly reach % / 100 weekly reach % This formula is represented by the curve shown in Graph 1. The shape of the 2001 data is described well by this curve although almost all of the cable/satellite channels, with the exception of Sky 1, Sky Sports 1 and UK Gold, lay below the curve. This indicates that the Double Jeopardy effect is even stronger than was observed 20 years ago, as these channels have even lower hours per viewer than would be predicted by the formula devised in Graph 1: Channel reach and average hrs per viewer (adults 16+ UK 2001 and UK 1984) Note: an individual is classified as viewer if they watch 10 or more continuous minutes on the channel in a week. Reach is defined as the reach among those able to receive the channel. Adults are used as the viewer base in 1984 and This pattern is the opposite of what we would expect to observe for a niche channel. Niche channels would be characterised by low reach (i.e. reaching a specific segment within the population) and high average hours per viewer (i.e. the segment would spend a substantial portion of their viewing time on the niche channel that catered to their interests). Barwise ANZMAC 2002 Conference Proceedings 2633

4 and Ehrenberg did discover some of these channels in the USA, minority language and religious stations had low reach but very high average hours per viewer. In the UK there does not seem to be any exceptions similar to those noted. The fact that these types of channels are not available in the UK market, or are too small to be measured, may be one explanation. Another is that channel proliferation has led to audience fragmentation, as is well known, but not strong audience segmentation (i.e. different channels being viewed by relatively small numbers of viewers presumably with some common characteristic, such as sex, age, interest, etc for a substantial portion of their viewing time). The four terrestrial channels (BBC1, ITV, BBC2, Ch4) that were on air in 1984 have undergone some changes in the level of viewing they attract (their movement is indicated by the arrows on Graph1). Channel reach has decreased very slightly for all four channels, whilst average hours spent per viewer in the week has dropped quite dramatically (approx hours) for BBC1 and ITV whilst BBC2 and Ch4 have increased their hours slightly (approx hours). These indicators are also reflected by the change in viewing share attracted by each channel since the 1980s. These changes are mainly as the result of new entrants (channels) gaining share from the terrestrial channels, as shown in Table 1 below. ITV1 is the worst affected losing just over 18% of its pre-cable/satellite/ch5 viewing share. In addition terrestrial channels now only account for around 60% of all viewing (in multichannel homes) compared with the 100% enjoyed in the past. That said, it is not all that surprising to note that even those that pay for TV, spend less than half their viewing time watching it! Table 1: Annual % shares of viewing (individuals, , UK) Channel Year BBC1 BBC2 ITV1 CH4 CH5 C/S/O Change Source: BARB, N.B Channel 4 introduced in 1982, Channel 5 in 1995 (Source: Channel Profiles Although no niche channels were discovered this does not mean that there is no audience segmentation, just that it is relatively weak. Examining how individuals in different demographic groups allocate their viewing time across the channels and the composition of each channels audience illuminates this point. In the interest of brevity the two most dramatic cases, which may seem somewhat intuitive, are examined: children and children s channels, and men and sports channels. Children in multi-channel homes spent 21% of their viewing time watching children s cable/satellite channels compared to 6% spent by adults. As expected children s channels audience composition was skewed towards children, they made up on average 45% of the audience compared to the average channel which comprised just 20% children. (Channels included in analysis: Discovery Kids, Nicktoons, Boomerang, Cartoon Network, Playhouse Disney, Toon Disney, Fox Kids, Nick JR, Nickelodeon, The Disney Channel, Trouble). ANZMAC 2002 Conference Proceedings 2634

5 Men in multi-channel homes spent 6% of their viewing time watching sports channels whilst women spent 2% and children 3%. The audience compositions were skewed towards men with men comprising, on average, 65% of the audience compared with the average channel which comprises 51% males. (Channels included in analysis: Sky Sports 1, Sky Sports 2, Sky Sports 3, Sky Sports Extra, Sky Sports News, Eurosport, Eurosport News, ITV Sports, ITV Sports Select, Extreme Sports Channel) Although we can clearly see that the different channel genres attract varied levels of viewing by different demographic groups, it is important to remember that the differences are not large. For example, sports channels do attract 14% more males than the average channel but none-the-less they still only spent 6% of their viewing time watching the 10 channels included in the analysis, whereas they spend 22% of their time watching BBC1 and 20% watching ITV1. In the case of children, the story is somewhat similar, although as children are relatively light viewers, watching around 15 hours of TV a week compared to 25 for adults, cable/satellite is an important means of reaching them. Although they too spend 16% of their viewing time watching BBC1 and 16% watching ITV both larger than any one children s channel. Implications and Conclusion These finding have important implications for TV advertising strategy and coupled with the recent developments in the UK provide clues for the TV market in Australia. The patterns shown in the UK reveal that further channel proliferation and multi-channel penetration has not led to strongly segmented audiences created by niche or specialised programming, unlike the situation with radio and especially print media, audiences now spread their viewing over many more channels which has led to lower ratings levels. Cable/satellite TV has often been regarded as a highly specialised media that should be used to increase the frequency of a message to a specific target. Although this idea may be appropriate in certain instances, such as children s channel or particular sports channels. The absence of true niche channels suggests that cable/satellite TV should be considered in much the same way as free-to-air channels, just smaller. As Erwin Ephron (1998) argued about US TV most TV brands are themselves not highly targeted. They are mass goods, selling to a mass market, through a mass medium.. This paper has confirmed one aspect of TV viewing behaviour described by Barwise and Ehrenberg (1984). These benchmarks set down in the past provide us with the means and techniques to empirically test rather than just believing the hype. This programme of research is ongoing and aims to expand the arguments touched on in this paper, examine the US and Australian markets and delve into relative cost comparisons and cost-effectiveness of different media in reaching specific audiences. ANZMAC 2002 Conference Proceedings 2635

6 References Admap (anonymous), Managing in the Media Age4. Admap: BARB (Broadcasters Audience Research Board), Cable and Satellite Development , London, UK. [Online accessed 25/6/2002] URL: Barwise, T.P. and A.S.C. Ehrenberg, The Reach of TV Channels. International Journal of Research in Marketing 1, Ephron, E, The Case of the Near-Sighted Bombardier: A General Inquiry into the Value of Targeting in TV. European Society for Opinion and Marketing Research. McPhee, W.N., Formal Theories of Mass Behaviour, New York: The Free Press of Glencoe. The Economist, Power in your hand; A survey of television. The Economist, (April 13 th ), World Advertising Research Centre, 2002, WARC World Advertising Trend 2002 [Online accessed 25/6/2002] ANZMAC 2002 Conference Proceedings 2636