The Impact of Converged TV Technology on Actual Audience Behaviour Sarah Pearson July 7 th 2009

1. The Impact of Converged TV Technology on Actual Audience Behaviour Sarah Pearson July 7th 2009 Strictly private and confidential – no reproduction or transmission without permission

2. 1-3-9 Consortium Members Strictly private and confidential – no reproduction or transmission without permission

3. Overall Aim of 1-3-9 • Provide early insights into actual (not claimed) audience behaviour in ‘converging homes’ where TV can increasingly be watched on screens 1ft, 3ft, and 9ft from the viewer. Strictly private and confidential – no reproduction or transmission without permission

4. Methodology . • Video ethnography (similar to our earlier research on PVRs in 2005). • Three phases with increasing ‘hot-housing’ (10.07, 5.08, 4.09) • 30 individuals in 9 homes (Phase 1) reducing to 19 individuals in 5 homes (Phase 3) • Mainly ‘early majority’ technology adopters Strictly private and confidential – no reproduction or transmission without permission

5. Claimed: Male (43) “It’s almost getting to the point where the recorded thing is the first thing that we turn onto – I see it as a first port of call” Actual: Embedded behaviour is to go straight to the EPG not the planner Claimed: (re: time shifting) “70 (recorded) 30 live” Actual: 88% live, 11% time shifted, 1% online VoD Claimed: Female (15) “I hardly watch anything live anymore, its always slightly delayed.” Actual: 64% live, 31% time shifted, 6% online VoD Claimed: Female (44) “Nine times out of ten we’ll put on something we recorded” Actual: 85% live, 15% time shifted Claimed: Male (42) “I now look at channels that I would never actually watch” Actual: 43% Channel 4, 28% BBC, 27% ITV Claimed behaviour unreliable, reflects self perception not actual behaviour Strictly private and confidential – no reproduction or transmission without permission

6. Some highlights • Big channels are here to stay! • 9ft screen : PVR users want bigger hard-drives not more VoD • The 3ft screen is best for private VoD Strictly private and confidential – no reproduction or transmission without permission

7. 1: Big channels are here to stay Results From Phase 3: • Even with ‘hot-housing’ (Phase 3) • 61% of viewing was still live on the 9ft screen • 94% was regular linear TV (mostly from the main channels) watched live, time shifted (PVR+TV), or catch-up TV (3ft or 9ft) Strictly private and confidential – no reproduction or transmission without permission

8. 1: The limited impact of true OD viewing • Only 6% of total viewing, despite ‘hot-housing’ • Despite breadth of choice online, 50% of video viewing on the 3ft was iPlayer and 4oD. • 71% of YouTube viewing was TV content originally broadcast on ITV or BBC • PVR users find it easier to choose from a few favourite channels, usually BBC, ITV and C4 • On Demand will have little impact on big channels which remain strong Strictly private and confidential – no reproduction or transmission without permission

9. 2: PVR users want bigger hard-drives, not more On Demand • PVR use increased from 15% Phase 1 to 28% Phase 3 • PVR dominates non-live viewing “We don’t have a need for it (VoD) anymore, it’s much easier to use the Virgin +.” Strictly private and confidential – no reproduction or transmission without permission

10. 2: PVR users want bigger hard-drives, not more On Demand Content viewed from planner • Hand picked ‘archive’ on the planner reduces appetite for OD • “We don’t need On Demand, we have a resource and that’s the recordings” • PVR users want the capacity to build larger archives: “There’s never enough space … even with the HD, the space that’s got on it, you still get to 5%” • As hard-drives get bigger, VoD on the 9ft may become increasingly redundant Delay TV 65% Delay TV 29% Phase 2 Phase 3 Archive TV 35% Archive TV 71% Strictly private and confidential – no reproduction or transmission without permission

11. 3: The 3ft screen is the right (private) space for On Demand In PVR homes, VoD may be more successful on the 3ft - over half content viewed is long form Average time spent viewing online VoD per person per day • Why are viewers happier to sit at 3 foot? Need to understand the dynamics of main set – Viewers access two types of content off the PVR • Compromise content enhances the social viewing experience • My TV enhances the private viewing experience but rare and infrequent • Compromise wins on the 9ft because the 9ft is perceived as a social space • The 3ft screen is emerging as an alternative space for My TV • As private viewing on the 3ft goes up, social viewing on the 9ft goes up: • Social viewing > Phase 1: 70%, Phase 2: 75%, Phase 3: 78%. As 3ft increases > compromise on 9ft. Strictly private and confidential – no reproduction or transmission without permission

12. The Laptop is the right (private) space for VoD • 3ft screen offers a different experience • Bingeing • ‘Build up’ to high urgency on 9ft • Seek out new or free content • 3ft is a better option than the 9ft screen • 84% of online VoD is on laptop in the lounge • Semi-mobile so context is flexible • Lean-back experience more possible in lounge • Familiar TV environment/more prompting • Private viewing in social space Future households may have a network of screens that are complementary and used simultaneously Strictly private and confidential – no reproduction or transmission without permission

13. Some highlights • Big channels are here to stay! • 9ft screen : PVR users want bigger hard-drives not more VoD • The 3ft screen is best for private VoD Strictly private and confidential – no reproduction or transmission without permission

14. Thank you Strictly private and confidential – no reproduction or transmission without permission