In 2012, Deloitte predicts that full-screen smartphone owners and tablet owners will likely use their devices as portable digital video recorders (DVRs) to catch up on five billion hours of TV while commuting on public transportation. This assumes an installed base of at least 400 million full-screen, high-end smartphones¹¹⁹ and over 100 million tablets¹²⁰ at mid-year, and once weekly usage¹²¹.

This will represent an acceleration in the of use of commuting time to watch programs – especially among younger viewers who typically have the most devices, and who currently spend the least amount of time in front of a TV¹²². Almost all of the video content will have been pre-loaded onto the device at home; network congestion, data caps, and uneven or inadequate mobile broadband speeds mean that TV streamed while commuting will likely be less than one percent of all video watched¹²³.

Commuters have always needed something to pass the time, and many of them discuss the previous night’s television shows with colleagues and friends at the office. Combine these two habits with the increasing ubiquity of tablets and full-screen smartphones and it is easy to see why the catch-up commuter concept is taking off.

People hate missing their favorite TV shows. Two of the most popular recent innovations in television watching – the DVR and on-demand services – are primarily used to catch up on missed shows within seven days of the initial broadcast.

Tablets and smartphones can be thought of as portable DVRs. The falling price of memory means that storing video in sufficient quality is not a major challenge – a 32 GB SD card, sufficient to record tens of hours of content, is now available for under $40¹²⁴. Downloading content at home, either through a Wi-Fi connection or even over a short-range wired or wireless connection from a living room DVR removes the reliance on cellular mobile to stream content while travelling.

Catching up on television is likely to become an attractive option for commuters to while away their journey, in addition to reading paid-for and free newspapers, playing video games or listening to music.

As cities experience increased traffic congestion, the appeal of catch-up TV during the commute should also increase.

Catch-up commuting is likely to be hindered in 2012 by the technological complexities around recording television content onto phones and tablets. And in some cases, it isn’t even legal to do so. As rights owners, broadcasters, and device manufacturers work more closely together, the copying of content should become increasingly automated, and demand will likely rise accordingly.

The use of commute time to watch television will be bolstered by the growing availability of TV programs and movies for download on airplanes, long-distance trains and buses. Seat-back entertainment has been common on planes for decades, but represents a major capital investment, as well as significant operational cost. Transport providers are increasingly offering Wi-Fi networks to passengers¹²⁵. Adding a pre-loaded multimedia server into any plane, train or bus that already offers Wi-Fi enables video to be streamed to the devices customers are already travelling with. In the medium-term this could even enable transport companies to remove existing seat back systems, which would reduce maintenance costs and increase fuel efficiency by reducing the carried weight in the vehicle¹²⁶.

Bottom line

Catching up on television while commuting is a service for which there is already strong latent demand. A minority of commuters on public transportation already watch television programs and movies on their phones and tablets, sometimes by modifying the device firmware to enable easier content transfers.

Making TV content available to commuters can do much to increase perceived value provided by various players across the entire business ecosystem.

For content providers, offering TV shows to commuters should be broadly positive, as it will generally mean more time for their content to be consumed. Catch-up commuters are unlikely to reduce the amount of time spent watching television at home; rather, they will probably watch more of the content they like. This is similar to what happened with DVRs: households ended up watching more television, not less¹²⁷.

For pay TV platform owners, catch-up commuting should be a way to manage churn among existing customers. It could provide an additional way for customers to access premium content.

Commuters watching pre-loaded video on mobile devices could be a benefit for mobile network providers. Watching stored programs instead of streaming Web content or video frees up bandwidth, enabling stressed networks to handle more lucrative traffic¹²⁸.

For content providers that already serve commuters, such as publishers of free newspaper and video game vendors, the consumption of TV while commuting is likely to be a threat. Even if the overall amount of commute time is steadily rising due to greater urbanization and worsening congestion, the growth in on-the-go TV viewing may well be greater.

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.

¹¹⁹The volume of the installed base for the full-screen, high-end smart phones are estimates based on existing knowledge, conversations with industry players and published industry estimates and forecasts, including: CIO mission: ‘Reimagine IT’, CIO New Zealand, 16 November 2011: http://cio.co.nz/cio.nsf/news/EB7766A85703C6CDCC25794A00116619; Smartphone usage set to rocket to 1.7 billion by 2014, The Independent, 27 April 2010: http://www.independent.co.uk/news/business/news/smartphone-usage-set-to-rocket-to-17-billion-by-2014-1955258.html

¹²⁰The volume for the installed base of tablets are estimates based on existing knowledge, conversations with industry players and published industry estimates and forecast including: Morgan Stanley Blue Paper on Tablet Demand and Disruption, Page 7, 14 February 2011: http://www.morganstanley. com/views/perspectives/tablets_demand.pdf ; Andy Rubin: There Are 6 Million Android Tablets Out There, Mashable, 19 October 2011: http://mashable.com/2011/10/19/6-million-android-tablets/

¹²¹This is equivalent to about double all long-form television content watched online in the United States in 2011. Data for online video is from comScore. It is assumed every smartphone owner watches an average 10 minutes TV on their smartphone, and every tablet owner watched 15 minutes weekly on their tablet.

¹²²Younger viewers generally have more technology, and are more likely to use technology to manage their consumption of television. For example see: Younger TV Viewers Use Tech More to Catch Up on Favorite Shows, Nielsen Media Research cited in Marketing Charts: http://www.marketingcharts.com/ television/younger-viewers-use-tech-more-to-catch-up-on-favorite-tv-shows-2624/nielsen-broadcast-tv-episode-catch-up-streaming-Websites-by-agegenderjpg/

¹²³BBC survey shows 3G coverage in the UK far more patchy than mobile operator coverage maps suggest, Unwired insight, 25 August 2011: http://www.unwiredinsight.com/2011/bbc-3g-coverage

¹²⁴Based on pricing of 32 GB SDHC cards on http://www.amazon.com/ as of December 2011.

¹²⁵For example: Gogo to bring enhanced Wi-Fi to Virgin America, expands video streaming on American Airlines, Engadget, 16 September 2011: http://www.engadget.com/2011/09/16/gogo-to-bring-enhanced-wifi-to-virgin-america-expands-video-str/; Wi-Fi coming to international flights, CNN, 14 November 2011: http://edition.cnn.com/2011/11/14/travel/united-wifi-international-flights/index.html

¹²⁶American Airlines to expand Gogo Wi-Fi streaming across 400 planes, Australian Business Traveler, 6 October 2011: http://www.ausbt.com.au/americanairlines-to-expand-gogo-wifi-streaming-across-400-planes; Qantas begins iPad trials for Wi-Fi movie streaming this month, Australian Business Traveler, 20 October 2011: http://www.ausbt.com.au/qantas-begins-ipad-trials-for-wi-fi-movie-streaming-this-month

¹²⁷DVR households in the United States watch more television than non-DVR households. Source: DVR use in the U.S., Nielsen’s State of the Media report, December 2010: http://blog.nielsen.com/nielsenwire/wp-content/uploads/2010/12/DVR-State-of-the-Media-Report.pdf

¹²⁸AmtrakConnect Wi-Fi - the Official Wi-Fi Network of Amtrak, Amtrak Website: http://www.amtrak.com/servlet/ContentServer?c=Page&pagename=am/Layout&cid=1246044330724