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You are here: Home / TV / What is the influence of VOD and streaming services on linear TV?

What is the influence of VOD and streaming services on linear TV?

6th April 2018 by Aidan King

It is no secret that the UK’s TV landscape is evolving, and TV consumption habits are changing. More and more people are supplementing, or even switching to paid-for streaming services such as Netflix, Amazon Prime and Hulu. This has even led to a newly emerging movement in America that is slowly spreading oversees called ‘cutting the cord’, with people cancelling their TV cable due to rising costs or declining interest in traditional cable programming for example.

A study conducted by Ofcom in 2017 showed that 31% of interviewees said they now use Netflix and 20% use Amazon Prime. YouTube took 38%, showing that people now have more freedom to watch what they want, where they want and when they want with the rise of portable devices, fast broadband connections and smart TV ownership (36% in 2017 vs. 27% in 2016).

But on-demand services are also becoming more mainstream: out of the 2,356 adults interviewed, 63% cited BBC iPlayer, 40% ITV Hub and 26% All4. According to Ofcom’s 2017 Communications Market Report, 67% of adults say they like to watch TV-on-demand to avoid adverts, whilst 35% say they ‘binge-watch’ at least weekly.

What is the impact all the above has had on linear TV over the past few years? In the UK, live broadcast TV remains a principal component of TV viewing; especially for news, sports events or even background noise. If the number of young adults watching live TV has been in decline since 2012 (-23% vs. 2017, source: BARB), ABC1 25-54 adults with children still spend on average 16 more hours watching TV than VOD per week (source: TGI 2017 Q3). Paid-for and free TV services (such as Sky, Virgin Media and Freeview) only decreased by 2% between 2016 and 2017 (down to 94% from 96%) and live TV is still where people are more likely to see ads. According to Thinkbox, we watched 42% more standard TV ads in 2017 than in 2000.

All Response Media viewpoint
Linear TV will remain the dominant medium for performance advertisers for the short to medium term, due to its scale and pricing. Viewing figures are still buoyant and with more brand advertisers tempted by more targeted (and expensive!) digital options, the opportunity to take advantage of remnant airtime on linear could become even more pronounced. The ad-free subscription models by suppliers like Netflix can only survive for so long and even if demand increases at the same pace, there will have to come to a point where additional funding will be required to generate fresh content to maintain the phenomenal growth curve. For now, though, linear TV as we know it is safe and remains the battleground where businesses can grow quickly and efficiently.

Read more information on our TV services.

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