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Customising the TV Viewing Experience - UK - June 2009

With the growth of on-demand services, consumers now have more ways of watching TV than ever before, while the growing popularity of personal video recorders (PVRs) is allowing greater control over viewing schedules. Customisation is clearly a growing trend, but what effect is this having on traditional TV models?

Mintel’s research indicates that PVRs have a positive influence on TV viewing, with a third of owners agreeing that they watch more TV now. Both Sky and Virgin Media agree that they increase customer loyalty; however, both are looking at new advertising models to counteract PVR owners’ tendency to skip adverts. And with two thirds of internet users accessing TV catch-up services, just how relevant is live TV to today’s viewers?

This report explores whether consumers are indeed taking control of their own schedules, exploring the use of PVRs – otherwise known as digital video recorders (DVRs) or digital TV recorders – and looks at the impact on traditional TV viewing. It also looks briefly at online TV and video-on-demand (VoD) services (these are looked at in greater detail in Mintel’s reports Entertainment on Demand – UK, May 2009 and Online Video Content – UK, February 2009).

Main issues

  • What are the penetration levels of PVRs and which is the most popular platform?

  • What are PVR owners’ viewing habits? Do they watch TV ‘live’ any more, or is everything recorded?

  • Do PVR owners deliberately avoid adverts?

  • Who watches online TV and what impact does this have on their viewing habits?

  • How much customisation do viewers want and is it causing confusion?

  • Where do other services, such as video-on-demand, pay-per-view and the red button fit in?

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Table of contents

  1. Issues in the Market

      • Main issues
        • Definition
          • Abbreviations
          • Future Opportunities

            • Let’s Talk About It
              • Too much choice
                • Sell it to me
                • Market in Brief

                  • Towards a digital future
                    • The UK embraces technology
                      • Internet users like TV
                        • TV when you want it
                          • PVR habits and attitudes
                            • The impact on advertising
                            • Internal Market Environment

                              • Key points
                                • TV viewing up in 2008
                                  • Digital switchover in progress
                                    • Size isn’t everything for TVs
                                      • Much new technology still in early adopter phase
                                        • Figure 1: Trends in presence of new technology at home, 2004-08
                                      • Laptops point to more flexibility
                                        • Figure 2: Computer penetration, UK, 2004-08
                                      • Seven in ten online
                                        • Figure 3: British internet penetration at home/work/place of study or elsewhere, by gender, age, socio-economic group, region and working status, Jan 2004-Jan 2009
                                      • Broadband now the norm
                                        • Figure 4: Internet use and type of connection, UK, 2004-08
                                      • Broadband getting faster
                                        • Figure 5: Broadband connection speed, 2008
                                      • Email and internet top computer uses
                                        • Figure 6: Trends in home PC usage, 2004-08
                                    • Broader Market Environment

                                      • Key points
                                        • Economy
                                          • The recession continues to bite
                                            • Increasing numbers finding it “difficult”
                                              • Figure 7: Current feelings about household income, 2007 and 2008
                                            • The economy tops list of concerns
                                              • Figure 8: How concerns of the British population have shifted over the past year/2 months, February 2008-January 2009
                                            • Spending intentions altered by downturn
                                              • Figure 9: Spending cutbacks over the next six months, December 2008
                                            • Leisure spending intentions
                                              • Figure 10: Impact of the recession on leisure activities, April 2009
                                            • Age trends emphasise the digital divide
                                              • Households still getting smaller
                                                • Figure 11: UK household sizes, 2004-14
                                            • Competitive Context

                                              • Key points
                                                • Live TV trumps the PVR
                                                  • Figure 12: Words that consumers use when describing ways of watching television, March 2009
                                                • Online video increasing its audience
                                                  • Figure 13: Top ten online video viewing properties ranked, by total UK unique visitors*, Jan 2008 and Jan 2009
                                              • Strengths and Weaknesses in the Market

                                                  • Strengths
                                                    • Recession boosts in-home leisure
                                                      • New ways to reach viewers
                                                        • PVR owners watch more TV
                                                          • Drives customer loyalty and satisfaction
                                                            • Alternative advertising opportunities
                                                              • Weaknesses
                                                                • Falling ad revenues
                                                                  • Audience fragmented even further
                                                                    • How to make it pay
                                                                      • Considerable up-front costs
                                                                        • Re-thinking the advertising takes time and money
                                                                        • Who's Innovating?

                                                                          • Key points
                                                                            • Sky goes green
                                                                              • Fox aims to keep viewers’ attention
                                                                              • Digital TV Market

                                                                                • Key points
                                                                                  • Nine in ten now multichannel households
                                                                                    • Figure 14: UK multichannel TV households, by platform, 2004-08
                                                                                • Segment Performance

                                                                                  • Key points
                                                                                    • Multichannel TV take up
                                                                                      • Figure 15: Take-up by platform, Q4 2008
                                                                                    • Multichannel market share
                                                                                      • Figure 16: Multichannel market share, by platform, Q4 2008
                                                                                    • Project Canvas
                                                                                      • Branded PVR market share
                                                                                        • Figure 17: Branded PVR market share, Q4 2008
                                                                                    • Companies and Brands

                                                                                      • Key points
                                                                                        • Overview
                                                                                          • British Sky Broadcasting Group plc (Sky)
                                                                                            • Figure 18: BSkyB financial and operating details, 2007-09*
                                                                                          • Virgin Media
                                                                                            • Figure 19: Virgin Media financial and operating details, 2007-09*
                                                                                          • Freeview
                                                                                            • Figure 20: Freeview financial and operating details, 2007-08
                                                                                          • 4oD
                                                                                            • Demand Five
                                                                                            • Platform Penetration

                                                                                              • Key points
                                                                                                • Most main TVs are now digital
                                                                                                  • Figure 21: Platform penetration on multiple home sets, April 2009
                                                                                                • Satellite shows youth bias
                                                                                                  • Freeview top on additional sets
                                                                                                    • Same platform services popular on second sets
                                                                                                      • Figure 22: TV services subscribed/owned on main set, by TV services subscribed/owned on second set, April 2009
                                                                                                    • ‘None of these’ on four in ten third sets
                                                                                                      • Figure 23: TV services subscribed/owned on main set, by TV services subscribed/owned on third set, April 2009
                                                                                                  • PVR Trends

                                                                                                    • Key points
                                                                                                      • Digital recorders in the home
                                                                                                        • Figure 24: Penetration of digital recorders, April 2009
                                                                                                      • Income determines PVR penetration
                                                                                                        • Satellite users show most enthusiasm
                                                                                                          • Figure 25: Digital recorders have in home, by TV services subscribed/owned on main set, April 2009
                                                                                                        • Multiple PVR ownership
                                                                                                          • Figure 26: Digital recorders have in home, by digital recorders have in home, April 2009
                                                                                                        • Digital recorder use
                                                                                                          • Figure 27: Digital recorder use, April 2009
                                                                                                        • ABC1s more likely to skip adverts
                                                                                                          • Families make use of PVR facilities
                                                                                                            • Older PVR owners missing out on extras
                                                                                                              • Sky+ owners biggest ad-skippers
                                                                                                                • Figure 28: Use PVR for activities all the time, by digital recorders have in home, April 2009
                                                                                                              • Extras provide added value for occasional use
                                                                                                                • Figure 29: Occasionally use PVR for activities, by digital recorders have in home, April 2009
                                                                                                              • Six in ten PVR owners never PPV
                                                                                                                • Figure 30: Never use PVR for activities, by digital recorders have in home, April 2009
                                                                                                            • Online TV Viewing

                                                                                                              • Key points
                                                                                                                • BBC iPlayer heads TV catch-up
                                                                                                                  • Figure 31: Services used to watch TV online, April 2009
                                                                                                                • Younger internet users making most use of online TV
                                                                                                                  • Figure 32: IPTV providers, by age, gender and socio-economic group, April 2009
                                                                                                                • IPTV viewers watch a range of services
                                                                                                                  • Figure 33: IPTV providers, by IPTV providers, April 2009
                                                                                                                • Cable customers more likely to use catch-up TV
                                                                                                                  • Figure 34: IPTV providers, by TV services subscribed/owned on the main set, April 2009
                                                                                                              • Attitudes Towards TV Watching and Schedules

                                                                                                                • Key points
                                                                                                                  • Live TV still a winner
                                                                                                                    • Figure 35: Attitudes towards watching TV and schedules, April 2009
                                                                                                                  • Younger generations make the most of new technology
                                                                                                                    • PC viewers also downloaders
                                                                                                                      • Figure 36: Statements on watching TV, by most popular other statements on watching TV, April 2009
                                                                                                                      • Figure 37: Statements on watching TV, by next most popular other statements on watching TV, April 2009
                                                                                                                    • One in five subscribers intends to switch or reduce package
                                                                                                                      • Figure 38: Statements on watching TV, by TV services subscribed/owned on main set, April 2009
                                                                                                                    • More TV for Sky+ and V+ owners
                                                                                                                      • Figure 39: Statements on watching TV, by most popular digital recorders have in home, April 2009
                                                                                                                      • Figure 40: Statements on watching TV, by next most popular digital recorders have in home, April 2009
                                                                                                                  • Targeting the New Breed of TV Viewer

                                                                                                                    • Key points
                                                                                                                      • How many IPTV providers?
                                                                                                                        • Figure 41: Repertoire of IPTV providers, April 2009
                                                                                                                      • Keen IPTV viewers like the social side of TV
                                                                                                                        • Figure 42: Attitudes towards IPTV, by repertoire of IPTV providers, April 2009
                                                                                                                      • Target groups
                                                                                                                        • One-off Payment
                                                                                                                          • No Direct Debit
                                                                                                                            • TV Enthusiasts
                                                                                                                              • Indifferent
                                                                                                                                • TV Enthusiasts like it all
                                                                                                                                  • Figure 43: Statements on watching TV, by target groups, April 2009
                                                                                                                                • No Direct Debit-ers choose Freeview
                                                                                                                                  • Figure 44: TV services subscribed/owned, by target groups, April 2009
                                                                                                                                • Even the less keen have a PVR
                                                                                                                                  • Figure 45: Digital recorders owned, by target groups, April 2009
                                                                                                                                • Even TV Enthusiasts under-use PVR features
                                                                                                                                  • Figure 46: Use PVR for activities all the time, by target groups, April 2009
                                                                                                                                • Occasional use more common
                                                                                                                                  • Figure 47: Occasionally use PVR for activities, by target groups, April 2009
                                                                                                                              • Appendix – Internal Market Environment

                                                                                                                                  • Figure 48: Number of television sets in household, 2004-08
                                                                                                                                  • Figure 49: Screen size, 2004-08
                                                                                                                                  • Figure 50: Screen type, 2006-08
                                                                                                                                  • Figure 51: Television features, 2004-08
                                                                                                                                  • Figure 52: When television was obtained, 2004-08
                                                                                                                              • Appendix – Broader Market Environment

                                                                                                                                  • Figure 53: Trends in personal disposable income and consumer expenditure, 2004-14
                                                                                                                                  • Figure 54: Trends in the age structure of the UK population, by gender, 2004-14
                                                                                                                                  • Figure 55: Forecast adult population trends, by socio-economic group, 2004-14
                                                                                                                              • Appendix – Platform Penetration

                                                                                                                                  • Figure 56: Main TV in home, by demographic sub-group, April 2009
                                                                                                                                  • Figure 57: Second TV in home, by demographic sub-group, April 2009
                                                                                                                                  • Figure 58: Third TV in home, by demographic sub-group, April 2009
                                                                                                                              • Appendix – PVR Trends

                                                                                                                                  • Figure 59: Most popular digital recorders have in home, by demographic sub-group, April 2009
                                                                                                                                  • Figure 60: Next most popular digital recorders have in home, by demographic sub-group, April 2009
                                                                                                                                • PVR use
                                                                                                                                  • Figure 61: Use of digital recorder, by demographic sub-group, April 2009
                                                                                                                                  • Figure 62: Use of digital recorder, by demographic sub-group, April 2009
                                                                                                                                  • Figure 63: Use of digital recorder, by demographic sub-group, April 2009
                                                                                                                                  • Figure 64: Use of digital recorder, by demographic sub-group, April 2009
                                                                                                                                  • Figure 65: Use of digital recorder, by demographic sub-group, April 2009
                                                                                                                              • Appendix – Online TV Viewing

                                                                                                                                  • Figure 66: IPTV providers, by demographic sub-group, April 2009
                                                                                                                              • Appendix – Attitudes Towards TV Watching and Schedules

                                                                                                                                  • Figure 67: Most popular statements on watching TV, by demographic sub-group, April 2009
                                                                                                                                  • Figure 68: Next most popular statements on watching TV, by demographic sub-group, April 2009
                                                                                                                              • Appendix – Targeting the New Breed of TV Viewer

                                                                                                                                  • Figure 69: Repertoire of IPTV providers, by demographic sub-group, April 2009
                                                                                                                                  • Figure 70: Target groups, by demographic sub-group, April 2009

                                                                                                                              Companies Covered

                                                                                                                              • Advertising Association (The)
                                                                                                                              • Aldi Stores Ltd (UK & Ireland)
                                                                                                                              • Amazon.co.uk
                                                                                                                              • Asda Group Ltd
                                                                                                                              • Bank of England
                                                                                                                              • Bertelsmann AG
                                                                                                                              • British Broadcasting Corporation (BBC)
                                                                                                                              • British Market Research Bureau (BMRB)
                                                                                                                              • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                              • Broadcasters' Audience Research Board Limited
                                                                                                                              • BT Group plc
                                                                                                                              • Channel 4
                                                                                                                              • Co-operative Group
                                                                                                                              • Competition Commission
                                                                                                                              • Confederation of British Industry
                                                                                                                              • Council of Mortgage Lenders
                                                                                                                              • Facebook, Inc.
                                                                                                                              • Fox Interactive Media
                                                                                                                              • Gfk NOP
                                                                                                                              • Google UK
                                                                                                                              • Government Actuary's Department (GAD)
                                                                                                                              • Independent Television Commission
                                                                                                                              • International Monetary Fund
                                                                                                                              • ITV plc
                                                                                                                              • J. Sainsbury
                                                                                                                              • Lidl (UK)
                                                                                                                              • Marks & Spencer
                                                                                                                              • Ofcom
                                                                                                                              • Sony Pictures Entertainment
                                                                                                                              • T-Mobile (UK) Ltd
                                                                                                                              • Tesco Plc
                                                                                                                              • The Carphone Warehouse Ltd
                                                                                                                              • Tiscali UK
                                                                                                                              • Virgin Media Ltd
                                                                                                                              • Virgin Mobile
                                                                                                                              • Waitrose
                                                                                                                              • Wm Morrison Supermarkets
                                                                                                                              • World Advertising Research Center
                                                                                                                              • Yahoo! UK & Ireland
                                                                                                                              • YouTube, Inc.

                                                                                                                              Customising the TV Viewing Experience - UK - June 2009

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