The atomisation of the television audience

On July 3rd, at 9.52pm, 24.4 million people watched Eric Dier score the winning penalty against Colombia - the biggest audience since the 2012 Olympic Games.¹ A few weeks later, on July 30th, an average of 3.6 million watched the final of Love Island, with a peak of 4.1 million. This was a record for ITV2.²

These ratings are significant achievements. Television’s ability to gather massive audiences is unparalleled. No other medium can grab tens of millions of simultaneous consumers. Aside from TV, only radio can deliver regular, simultaneous audiences in the millions. But these numbers are exceptional: they do not presage a return to an era of regular 20 million plus audiences.

Over the next five years, we expect total time spent watching long-form programmes to remain broadly constant, at about four hours per day.³ (Between 2014 and 2017, total TV screen time varied between 249 and 252 minutes, of which about ten minutes was video games).⁴

TV should maintain its unique ability to deliver massive (tens of millions) audiences on the main channels, and millions of viewers on secondary channels. No other medium – traditional or online – is likely to emulate TV’s ability to deliver multiple programmes that are watched by millions of viewers on a daily basis.

However, we expect 10 million plus audiences to become increasingly infrequent, occurring occasionally each quarter. The super peaks, at 20 million and higher, will be even more irregular: only major football tournaments in which the home team is playing well, or Olympic Games in which the home team is ratcheting up gold medals. These will occur every two years at most, and less often if the home team fails to do well.

The daily peaks, with millions of viewers, will become steadily lower: still in the millions, but fewer millions than in the past. They will be frequent, but the volumes will decrease.

Soaps are still watched by millions in 2018, but ratings have descended from the high to the mid-millions. In 2012, soap opera episodes were watched by over eight million viewers 422 times. In 2017, this only happened on 63 occasions. There was a steady volume of episodes with five million plus audiences: 762 in 2012 and 780 in 2017. But by 2023 three million audiences may be the current five.⁵

Soaps and news bulletins, historically the mainstay of the top 50 most watched programmes in the UK, should maintain their dominance over the next five years, but average ratings will likely continue to decline.

The declines in the volume of viewers per programme are not a failure of TV, but rather a testament to its increasing success: it is doing a better job of reflecting the diversity of its audience.

Television is a mirror to society, as is the case with all media. The better it reflects its viewer, the more it resonates, and the larger the audience. Society is heterogeneous, composed of a kaleidoscope of interests, some mainstream, but most niche.

Soap operas are written to reflect, and occasionally direct, the national conversation. But they cannot reflect the thousands of distinct discussions happening among smaller groups of people. The national conversation, as driven by TV, is inevitably fragmenting.

It may be that we are as much defined by our income group, stage of life, ethnic background as our nationality. A growing number of younger viewers may eschew soaps for other local content, or they may find that US reality shows or foreign YouTube vloggers better reflect their interests or aspirations. A programme that reflects life on a minimum wage may flourish across multiple countries, and not just one. A 12-year old viewer in the UK can relate equally well to a 12-year old character in a sitcom set in another developed country. Those about to be married may prefer to watch the US version of Say Yes to the Dress as well as the UK one.

The UK’s black, Asian and minority ethnic (BAME) 7.6 million⁶ population might feel that content like Netflix’s Dear White People, which is about people of colour, is a more authentic mirror than a programme that just features people of colour.⁷

The proliferation of choice, and the growing ease in finding content that better reflects the viewer, will cause audiences to atomise further at a per programme level. But TV, in all its forms, is thriving. Total time spent watching on-demand and broadcast programmes is relatively constant at about four hours per day.⁸

The atomisation of audiences is partly being enabled by the emergence of micro-profiling. Viewers are being categorised by their common interests, rather than the relatively blunt approach of demographic profiling (age, gender and location).

Effective micro-profiling will be critical to helping content find viewers, rather than relying on viewers to have the patience to find programming among ever expanding online libraries: viewers have always valued choice but abhorred choosing.

Netflix is well known for its profiling – it has identified 2,000 separate ‘taste communities’ across the 190 markets it operates in;⁹ UK broadcasters’ accumulation of first party data should also enable them to deliver ever more relevant targeting. This first party data may help a service like Channel 4’s foreign drama VOD service, Walter Presents, to deliver more personalised recommendations.¹⁰

A further enabler of atomisation of audiences will be more sophisticated subtitling and dubbing, to enable stories told in any language to be accessible to viewers around the world.

Casa de Papel is Netflix’s most popular non-English series ever.¹¹ Shot in Spanish, it has had minimal impact in predominantly English-speaking territories, including the UK.¹² Sophisticated dubbing, with mouth movements expertly aligned to dialogue, would likely increase this series’ appeal among UK audiences, and those in the non-Hispanic US and Canada.¹³ It would also be far cheaper than recreating an English language version of that content.¹⁴

Micro-profiling may not always be the answer to addressing different propositions. A brand new offering may work better. In the US market, in which Netflix, Amazon and Hulu are the established leaders, Wal-Mart may this year launch an SVOD service focused on Middle America, where its customer base is concentrated. Content and pricing will be designed to appeal to consumers in this region.¹⁵

This evolution into more specialist content is similar to developments in other media, such as news or music. Online, it is far easier for content providers to aggregate global micro-audiences. It is as simple for someone in the UK to subscribe to and access The New York Times (NYT) as it is to sign up to The Times.

The NYT, and other US newspapers, are steadily building their overseas subscriber bases. On a per country basis, the numbers are small, but in aggregate they are significant and growing in size and share: 14 per cent for the NYT as of end-2017, and 10 per cent for the Washington Post.¹⁶ Both publications continue to generate the majority of their audiences in their home countries, but readership is topped up by the micro-communities around the globe interested in US news.

Bottom line
Historically, the yardstick for success for a television programme was its audience. This metric will remain important, but it will be a metric among many.

In the UK market, audience size mattered most when TV consisted mostly of terrestrial offerings. Ratings mattered to commercial TV – as they do now – because of advertisers. It matters to the BBC, to demonstrate it was delivering on its remit.

The rise of pay TV is changing how TV should be measured: ratings matter but churn and average revenue per subscriber are equally important. The arrival of SVOD and its monthly contracts has made managing churn even more important. And a key way of diminishing churn is offering content that a viewer cannot give up. For some it may be sports, for some it may be a specific drama. The sport or the drama may be viewed by relatively few people in the UK, but if that content makes a subscriber loyal, then it should be considered successful.

Atomisation of audiences is the future, but it is one in which the TV industry can continue to thrive.

_____________________________________________________

¹ https://www.campaignlive.co.uk/article/englands-world-cup-victory-draws-24m-biggest-tv-audience-london-2012/1486943
² http://www.itv.com/news/2018-07-31/love-island-final-breaks-ratings-record-for-itv2/
³ See Figure 6: https://www.ofcom.org.uk/__data/assets/pdf_file/0014/116006/media-nations-2018-uk.pdf
⁴ See Figure 7: https://www.ofcom.org.uk/__data/assets/pdf_file/0014/116006/media-nations-2018-uk.pdf
⁵ See Figure 2.2: https://www.ofcom.org.uk/__data/assets/pdf_file/0022/117256/CMR-2018-narrative-report.pdf
⁶ https://www.bbc.co.uk/news/uk-politics-43831279
⁷ https://www.vice.com/en_us/article/z4gmw5/w8hy-netflix-has-decided-to-make-diversity-a-top-priority
⁸ http://www.endersanalysis.com/content/publication/tv-set-viewing-trends-unmatched-viewing-growth-and-channel-performance
⁹ https://www.adweek.com/tv-video/netflix-thrives-by-programmeming-to-taste-communities-not-demographics/
¹⁰ https://www.theguardian.com/tv-and-radio/2016/apr/08/sopranos-foreign-summer-tv-walter-presents-deutschland-83
¹¹ http://remezcla.com/film/money-heist-part-3-netflix-casa-papel/
¹² http://www.vulture.com/2018/06/how-netflix-swallowed-tv-industry.html
¹³ There are more Spanish speakers in the US than citizens in Spain: https://nypost.com/2015/06/29/us-has-more-spanish-speakers-than-spain/
¹⁴ http://www.vulture.com/2018/06/how-netflix-swallowed-tv-industry.html
¹⁵ https://variety.com/2018/digital/news/walmart-mark-greenberg-streaming-video-subscription-netflix-amazon-1202881274/
¹⁶ https://digiday.com/media/hunt-subscriber-growth-u-s-publications-look-abroad/