The Communication Companies and Markets Investigation Group (GIMEC) of the Faculty of Communication at the University of Navarra has presented a study titled “Identifiying the Drivers of Consumption for Audiovisual Content of Fiction and Entertainment in the Spanish Market”. Their conclusions have been grouped in the following decalogue, explaining ten keys in understanding audiovisual content consumption in Spain:
1. CHANGES IN AUDIOVISUAL CONSUMPTION PATTERNS: Linear TV consumption has decreased while online and mobile viewing is increasing throughout all times of day, both in prime time as well as during day time. Although the peak hour of audiovisual consumption online coincides with that of traditional prime time television, the rest of the day is full of micro-moments suitable for viewing content. The audience recognizes that they see less conventional television due to the time they spend viewing online content. Therefore, audiovisual services on demand compete directly with linear television for viewers’ time. The audience measurement systems are in a process of transformation to better adapt to the new patterns of audiovisual consumption in a multi-device environment, in order to improve the reliability of their data.
Data shows that since 2012, the record year for linear television consumption with an average of 246 minutes spent per person per day, there has been a steady decline until 2018 when viewers spent 216 minutes on average per day (without counting guests), a figure similar to that of 15 years ago, when television penetration was signifacantly lower than today. On the other hand, 63.4% of users recognize that they see less conventional television as a result of the time they spend on online viewing (Source: Kantar media, GIMEC online questionnaire).
2. GENERATIONAL DIVISION: A flight of young people from linear television towards other more personalizable and interactive audio-visual platforms has been observed. The younger the audience, the fewer minutes they spend on average. The audience profile of most generalist, traditional television channels is aging and young targets show low a affinity towards them. In addition, there is no evidence of a boomerang effect, that is, the theory that suggests that today’s young audience will return to television as they grow older. It does not appear that the trend in audiovisual consumption is going to reverse itself. If this pattern of consumption is maintained, it is expected that the older audience of the near future will consume content in a very different way to that which older people do today.
The data: The “millennial” audience in 2018 watched almost an hour and a half less linear TV per day compared to the general audience, 134 minutes to be precise. In addition, 1 in 3 (almost 75%) noted that they see less television for the time they spend on online viewing. With regards to the youngest audience profile analyzed (14-24 years), almost 98% admitted to viewing online content regularly. Less than 20% of the audience across all Mediaset and Atresmedia channels belong to this target segment; and with regards to the public operator’s main channel (La 1), around 45% of its audience are viewers aged 65 and over (Source: GIMEC Online Questionnaire, 2016, Kantar Media).
3. CONTENT AND DEVICES: Within the multiplatform television context, fiction (movies and series) stands out as the most watched type of content online, with the computer as the most utilized viewing device, followed by the smartphone. Although there is no direct relationship between the type of content consumed and the device used, we can conclude that the more attention the content requires, the larger the screen size conceivably preferred. Smaller devices instead tend to be used for content that can be enjoyed in fragments and on-the-go.
The data: Around 90% of users use computers to view content online and almost 74% use smartphones. Almost 60% of respondents admitted to using smart TVs as traditional TVs without taking advantage of the Internet connection. This data is confirmed by the deferred viewing figures provided by Kantar Media, since in 2018 only 6 minutes a day of on demand consumption on smart TV sets. Movies (88.3%) and foreign series (74.3%) are the preferred genres, in addition to the “other” category (82.8%), which includes very diverse content such as YouTube videos or music videos (Source: GIMEC Online Questionnaire, 2016).
4. INTERACTIVITY: Using second screens while viewing content is a widespread practice, which reduces the quality of the attention given to a particular medium. At the same time, interactivity enhances the “engagement” of the audience and content viewing at the time of its broadcast. For this, users mostly make use the smart phone. The second screen is always smaller than the main one. Only when the main device is a tablet do they admit to not using a second screen preferentially. An interest in interacting with other people is the main motive that encouragess the use of second screens, especially through messaging applications such as WhatsApp or interacting through social networks. Although technology has evolved radically in recent decades, the needs that people seek to satisfy through the media have not changed substantially, as one of the main motivations is strengthening interpersonal ties.
The data: More than 60% of users regularly use a second screen when viewing online content. They indicate doing so always or often (GIMEC Online Questionnaire, 2016).
5. THE AUDIOVISUAL MARKET AND CONTENT OFFERING: The audiovisual content offering has multiplied and audiences have become more fragmented. However, there is a trend towards and globalization in audiovisual entertainment companies. Linear TV channels have added “catch-up TV” services for their own traditional programming (with the consolidation between 2011 and 2013 of platforms such as RTVE à la carte, Atresplayer or Mitele), converged packages of telecommunications companies with audiovisual services and numerous video-on-demand platforms such as Netflix, HBO, Amazon Prime Video or Sky, among others, whose boom in Spain starteed in 2015. All this has caused a continuous increase in investment in television programming globally, although it has stagnated in large markets such as North America or Western Europe. It is possible to describe the situation as an audiovisual oversupply driven by OTT platforms, which have intensified phenomena such as binge watching. Thus, the way of broadcasting and consuming content such as series has changed dramatically, going from premiering individual episodes with a certain periodicity (akin to traditional TV) to the simultaneous release of entire seasons. The marketing system has also been weakened by windows and markets, since these services tend to release their content on their platform at the same time in all countries worldwide. This practice implies a decisive change in the management of audiovisual rights.
The data: In 2017, 145,000 million dollars were invested in television programming worldwide, of which 13 billion corresponded to two of the main OTT platforms: Netflix and Amazon Prime Video (Source: MipTV-mipcom, 2018).
6. THE INDUSTRY AND AUDIOVISUAL PRODUCTION: The increase in investment in television programming translates into a greater activity of audiovisual production. The new audiovisual services become potential customers for producers, who no longer only depend on traditional television operators. Although large companies in audiovisual production and distribution constitute a large part of the production, opportunities can also arise for local producers, who can directly offer their content to international platforms with a global audience and without the need to resort to distributors for each market. In this context the figure of the showrunner gains relevance, a scriptwriter-executive producer who is at the core of the creative-industry process. In addition, new producers of audiovisual content on the internet have been born (Youtubers influencers), which establish strong connections with their followers. Trust in them makes them powerful prescribers, and therefore good agents relevant to brands (advertisers) and their investments in advertising. The proliferation of producers with such a profile has in turn led to the emergence of a new intermediary agent dedicated to content management and representation, called Multichannel Networks (MCN).
The data: Most budgets of new Video On demand services are not intended for original content creation, but rather for the acquisition of content already produced. For example, Netflix devotes almost three quarters of its budget to buy third-party content, and Amazon 90%. Of the investment in original production, most of it goes to fiction, but more and more to entertainment programs, especially content classified as factual. For example, in 2017, Netflix premiered 84 titles of non-scripted entertainment programs of its own production (Source: MipTV-mipcom, 2018).
7. THE BUSINESS MODEL: The television subscription model is growing at the same time pay-per-view models decrease in prevalence, surpassing open television in revenues. There is evidence of an increase in the consumption of paid content in Spain, including the youngest sector of the population. In turn, the decrease in linear television consumption has not been accompanied by a proportional reduction in advertising revenues, although there has been stagnation, a circumstance in which external factors related to the economic context have also been affected. However, television continues to stand out as the destination of most media advertising investment. The large private television operators reap almost all television revenues for advertising.
The data: In 2017, paid television (2,152.69 million euros) exceeded the advertising revenue of free-to-air television (1,831.43 million) ), a trend that began a year earlier. In any case, of the 5,355 million in advertising investments in the media, 40% are destined for television. 85% of this figure is paid to Mediaset Spain and Atresmedia. One in every three households pays to view content (around 35%), with an audience close to 20 million viewers (Source: CNMC, 2018).
8. PERCEPTION OF QUALITY: The ability to entertain is the aspect that audiences associate to the largest extent to programming quality. The determining factor, one which audience gratification depends on above all is the quality of content offered, more important than the quantity of content offered or technical issues. The perception of television quality has not changed substantially in recent years, despite the growth of supply and technological improvements. The perceived quality of the news is what affects in a more decisive way the assessment made by the audience of television channels. With regards to fictional series, the aspects that most influence the perception of quality are the dialogue, the plot, the characters and the actors. In the case of entertainment programs, presenters and sets stand out. Both with fiction and entertainment TV, artistic staff occupy a decisive place in the perception of quality, revealing the existence of a certain star system in Spanish television.
The data: The perceived quality of TV in Spain fell from 3.32 out of 5 in 2008 to 3.17 in 2016. The figures vary depending on the educational level and age of the audience. For example, in 2016 the perceived quality was 3.35 out of 5 for those who only had primary education, but dropped to 3.14 for those who had secondary education, to 2.92 if they held a diploma and 2.82 for respondents who were university graduates. That same year, those over 65 rated TV quality at 3.34 out of 5, while those between 25 and 44 years -the least satisfied age group- gave a score of 2.86 (Source: GIMEC, Telephone survey).
9. TECHNOLOGICAL INNOVATION AND TELEVISION: Technology stands out as a disruptive and decisive factor in the configuration of the new model of audiovisual entertainment. Thus, the application of Artificial Intelligence and Big Data to improve the personalization of services, the user experience and the accessibility of the content are key. However, users still do not perceive that the automatic recommendations of these systems are fully satisfactory, since they show greater confidence in personal recommendations. Automatic recommendations are more effective when the content catalog is broad and the user is faithful to the platform. In any case, recommendations based on algorithms are revealed as a powerful marketing strategy. In the near future, Augmented Reality and Virtual Reality will also play a relevant role in TV, just as it gained relevance in other sectors such as videogames or e-sports.
10. CHALLENGES OF THE TELEVISION SECTOR: TV operators are immersed in a process of strategic restructuring and redefinition of their product offering, their business model and their identity. They have become global audiovisual entertainment companies with the aim of offering each content on the appropriate screen and reaching each target at the appropriate time and device. They also face notable uncertainties from the incursion of technological giants in the audiovisual sector such as Apple, Google, Facebook or Amazon. In this context, traditional television operators have begun to develop integration strategies and alliances, creating joint platforms to compete from a position of greater strength with new agents. For example, this is the case in Spain with the “Loves” TV service. An exhaustive knowledge of the audience stands out as a key factor to guarantee the success of audiovisual products, and one of the main axes around which the television companies should pivot in terms of thier activities and development. In any case, and despite the revolution that the sector is experiencing, TV retains its prominent position and influence in the media landscape. It continues to be the familiar medium of reference in a multi-screen ecosystem of which it is a part of, especially relevant for content such as live event streaming.
