The schedule dominates, still

In 2012, Deloitte predicts that 95 percent of television programs watched will likely be viewed live or “near live”, that is within 24 hours of broadcast. This is little changed from a decade ago. People will allow the TV schedule to guide almost all of their viewing choices, regardless of whether they are watching shows on a conventional TV, computer, or smartphone; and regardless of the network technology used be it cable, satellite, phone line or conventional antenna.

Contrary to some expectations, technology has not shattered the TV schedule, but rather made it stronger by making it more flexible¹⁰³. Adherence to the broadcast schedule does not appear to be an artifact of limited choices imposed by technology, but rather a fundamental aspect of TV viewing for most people.

As in previous years, in 2012 technology that enables the schedule to be averted will likely reach deeper into our homes, with ever improving specifications. Digital video recorder (DVR) storage will likely increase and penetration rates will likely rise,sup>104; in several major TV markets, including the US and the UK, DVR penetration has already exceeded fifty percent¹⁰⁵. Devices that further enable consumers to watch non-broadcast television, such as PCs, tablets, game consoles and connected TVs¹⁰⁶, will likely be found in a growing number of homes¹⁰⁷. In some markets, penetration rates for computers may near 80 percent of homes.

These devices are connecting to ever faster and popular¹⁰⁸ video-friendly broadband networks. Broadband speeds are increasing by double digits; video compression technologies are reducing the bandwidth required for video streaming; streaming services offer adaptive bit rates to reduce the load on the network; fiber optic technology is being rolled out further; and content delivery or distribution networks (CDNs) move frequently-watched video files closer to the consumer¹⁰⁹. These advances improve the video-ondemand proposition and can make network congestion and the resulting buffering almost a thing of the past over wired networks.

Finally, every year the library of video content available online stretches closer to infinity¹¹⁰. Much of it is on Websites for zero cost, or for just a few seconds of pre-roll and mid-roll ads.

Despite these factors that should be luring consumers away from traditional broadcast TV, the schedule remains surprisingly powerful¹¹¹. Humans seem to prefer structure, stability and predictability. In one study, the predictability of a reward stimulus was more important than the actual stimulus¹¹². We may be biologically and neurologically “hard-wired” to prefer schedules and routine, no matter how often we profess a desire to watch “what we want, when we want, where we want.”

What’s on TV can signal our brains about the time of day, day of week, and season of the year; a good scheduler knows how best to arrange programs to align with and reinforce these expectations. Anyone who has watched a Christmas special in July will understand why the schedule exists.

The schedule has been variously portrayed as a straitjacket, a waste of precious spectrum¹¹³, and dictatorial. But for the majority it is a resounding positive; a well-constructed schedule provides structure for what to watch and when to watch.

The best channels maintain their popularity due to their ability to commission and purchase programs which they know will appeal to their audience at each time of day.

Choice is cherished, but choosing is a chore¹¹⁴. Beyond a certain point, the more choice there is, the more likely we default to a guide. This applies across all aspects of our lives: we look to the Oscars to guide our choice of movies, to sommeliers to select our wines, to radio stations to choose the music we listen to. And we value television channels partly because of their ability to curate what we watch. Their challenge is to show programs that we are most likely to enjoy watching.

The tedium of choosing is why hundreds of millions of pay TV subscribers with subscriptions that include hundreds of channels constrain most of their viewing to just a handful¹¹⁵.

For thousands of years, humans consumed content communally. Whether enjoying Shakespeare at the Globe, gladiators in the Coliseum, or merely a wellpositioned table in a café, being part of a group enhanced the experience. As indicated by the phrase “the thrill of the crowd,” there can be as much pleasure in the massed spectators’ reaction as in the spectacle itself. Compliments and heckles alike have far less resonance and relish when they are not shared. TV viewing is more often prolonged when undertaken with company than alone.

And for many decades, rigidly-scheduled broadcast TV programs have largely defined the “national conversation.” The events covered on last night’s news, and the happenings on last night’s serial or sitcom are often the most common topics of conversation with co-workers and friends. A common viewing schedule brings us together and gives us something to talk about.

Online social networks are likely to enhance the schedule’s appeal, not diminish it. Social networks enable the commentary on programs to be shared not just with those in the same living room, but also with friends, families and strangers anywhere else. Social networks and their many-to-many communications can create additional interest about a program, with the greatest buzz typically for programs with youth audiences¹¹⁶. Whether contributing or only consuming the social chatter on a program, you need to be watching it when everyone else is.

The video-on-demand platforms that are likely to be most successful in 2012 are those with the closest proximity to the regular schedule; other platforms whose content is further from the schedule are likely to have less success, no matter how vast their libraries.

The dynamics that maintain the schedule’s strength are not one-off, or even cyclical. Those betting against the schedule are likely to be disappointed not just this year, but in years to come.

Bottom line

The public’s use of television technology to cling as closely as possible to the regular schedule raises the question of how exactly viewing should be measured. Current classification of viewing by technology, such as on-demand, DVR or live broadcast may not accurately reflect underlying consumer behavior.

On-demand platforms can be used to watch a program live, but they count as an on-demand view¹¹⁷. DVR playback may be just a few minutes later than live, but again this may not be counted as live, even if the viewer subsequently caught up with the live feed. To better understand why people watch when they do, measurements and terminology should reflect consumer behavior, rather than the underlying delivery platform. After all, viewing behavior is driven primarily by content, not technology.

In a world where schedules are sticky, conventional broadcasters will want to build on the power they hold. They can show advertisers the advantages of the schedule, and why it is not going away any time soon. Further, to stress their competitive differentiation versus other media, broadcasters can continue or even increase their efforts to build themed chunks of time, such as “comedy Thursdays.” Equally, broadcasters will likely continue to use “counter-programming” (scheduling shows with a specific demographic target at the same time as a competitor’s show that targets a different demographic) to boost their audience and ad sales.

Businesses providing alternate solutions for viewing video may want to rely less on “schedule-shifting” as their primary value proposition. A large video-streaming company has already acknowledged it is not competing directly with scheduled television, jestingly referring to itself as “re-run TV.¹¹⁸” Similarly, DVR companies may want to stress how their devices can be used to let viewers better enjoy the TV schedule, rather than focusing on schedule aversion. When DVR viewers miss the first few minutes of a show, they can use the DVR to catch up and thus have the same experience everyone else is having.

Advertisers and agencies will likely still need to think about ad campaigns within the context of a schedule, rather than buying spots or inserting product placements under the assumption that shows will predominantly be viewed at random times.

Finally, city planners will still need to specify their water system requirements with the TV schedule in mind. If viewers stick to the schedule, there will continue to be sudden changes in water pressure as millions of sports fans simultaneously take a break at half time!

Deloitte Canada, as referenced in videos, podcasts, or online materials related to TMT Predictions 2012, refers to Deloitte & Touche LLP, the Canadian member firm of Deloitte Touche Tohmatsu Limited.

¹⁰³In United Kingdom, 60 percent of shows recorded on one broadcaster’s DVRs were watched within one day; in DVR households, about 85 percent of television was watched live; in Germany, one broadcaster with an online TV service found that online viewing peaked within a day of broadcast. Source: How people really watch television, The Economist, 29 April 2010: http://www.economist.com/node/15980817

¹⁰⁴A growing number of 1 terabyte DVRs are now available; the first DVRs had about 80GB capacity available

¹⁰⁵Top UK media trends for 2011, Investor Today, 24 January 2011: http://www.investortoday.co.uk/News/Story/?title=Top%20UK%20media%20trends%20for%202011&storyid=4957&type=news_features

¹⁰⁶Connected TV penetration has been forecast to reach 20 percent (551 million homes) by 2016, compared to 10 percent in 2010. Source: Connected TVs will reach 20% penetration, Broadband TV News, 1 November 2011: http://www.broadbandtvnews.com/2011/11/01/connected-tvs-will-reach-20-penetra/

¹⁰⁷Penetration rates for computers and other connected devices vary significantly by country. For information on device ownership in the US, see: Gadget ownership over time, Pew Internet, 2011: http://www.pewInternet.org/Trend-Data/Device-Ownership.aspx

¹⁰⁸For more information on broadband speed improvements in OECD countries, see table 1f at the OECD Broadband Portal Webpage: http://www.oecd.org/document/54/0,3746,en_2649_34225_38690102_1_1_1_1,00.html

¹⁰⁹For example, see: CDNs Enjoy Double Digit Growth in 2010, Streaming Media.com, 5 November 2010: http://www.streamingmedia.com/Articles/News/Featured-News/Report-CDNs-Enjoy-Double-Digit-Growth-in-2010-71249.aspx

¹¹⁰Eight years of content (if all content were to be played sequentially) is uploaded to YouTube every day. Source: Statistics, YouTube Website: http://www.youtube.com/t/press_statistics

¹¹¹In Tokyo, a city which benefits from among the fastest broadband networks in the world, viewing of TV rose by 10 minutes per day between 2000 and 2008, to 216 minutes. Over the same period, roll-out of fiber to home networks increased significantly. Source: Changing the channel, The Economist, 29 April 2011: http://www.economist.com/node/15980859

¹¹²Predictability Modulates Human Brain Response to Reward, The Journal of Neuroscience, 15 April 2001: http://www.jneurosci.org/content/21/8/2793.short

¹¹³The Long Tail, Wired, Issue 12. 10, October 2004: http://www.wired.com/wired/archive/12.10/tail.html

¹¹⁴Barry Schwartz on the paradox of choice, TED, September 2006: http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html

¹¹⁵In the US, the average household tunes into less than 15 percent of the channels it has available for 10 minutes or more per week. This is equivalent to 16 or so channels out of an average of 118.6 channels available. Between 2006 and 2007, the average number of channels per US household jumped by 14 percent, but the number of channels watched stayed the same, and the proportion of channels watched fell. Source: Nielsen data cited in: Avg. U.S. homes Watch Same Number of Channels Weekly, Adweek, 6 June 2008: http://www.adweek.com/news/advertising-branding/nielsen-avg-us-homes-watchsame-number-channels-weekly-108685

¹¹⁶For an example, see: 20 TV Shows With the Most Social Media Buzz This Week, Mashable Entertainment, 1 November 2011: http://mashable.com/2011/11/01/social-tv-chart-11-1/

¹¹⁷Between 13 percent and 15 percent of requests for the BBC iPlayer television service are simulcasts. Source: Monthly Performance Pack, BBC, September 2011: http://downloads.bbc.co.uk/mediacentre/iplayer/iplayer_performance_monthly_0911.pdf

¹¹⁸Netflix Executives Agree: Streaming Is ‘Rerun TV’, PCMAG, 25 April 2011: http://www.pcmag.com/article2/0,2817,2384292,00.asp