The rise of the Zero TV household

The rise of the Zero TV household
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Brightcove’s Mark Blair explores how technological innovations are changing the way we deliver and consume video, and the impact of this on the broadcasting industry.

Rapid developments in digital video and cloud technology are enabling the rise of a new trend: the Zero TV household.

Consumers are less tied to traditional methods of consuming video content, like tuning in using the antenna sitting atop your roof. We’re already seeing the writing on the wall in overseas markets.

A recent report from Nielsen found that over 5 million households in the US don’t watch broadcast television offered by cable or satellite providers, up from 3 million in 2007.

You might think that these are people that just do not consume video. But 67% of them still do – they’re just getting it through different devices, their computer, tablet, smartphone or even their Smart TV.

Even a few years ago, watching catch-up TV or streaming live content was not the best experience. Advertisements sometimes didn’t load properly, which delayed viewing the content, mobile devices, if supported, had a limited range of content, and web browser incompatibilities put a bunch of barriers in front of potential consumers. But the game has changed. Advancements in cloud technology means it’s now easier for content and rights owners to seamlessly deliver high quality video to any number of devices.

So how has it affected Australian viewing habits over the years?

Credit Suisse recently examined the Australian radio and TV broadcasting industry and found that the total free-to-air (FTA) TV audience declined 6% from February 2012 to February 2013. This marked the 10th consecutive year-on-year decline in FTA viewing. Pay TV viewing also dropped 2%, while total television audience declined 5% year-on-year. 

At the same time, we’re seeing a huge uptake in connected devices.

Telsyte’s recent figures show that Australians bought more than 2.4 million tablets in 2012 alone, and that there are now 5 million tablet users in the country. For the period of 2010 to 2012, AIMIA’s annual study on mobile phone usage shows a 15% growth in the use of mobile phones for entertainment purposes. One in 10 people AIMIA surveyed indicated they were using their mobile phone daily for mobile TV. And, while that number might be considered low, it is growing steadily.

What happens to the broadcasters and content owners?

So, the proliferation of tablets, smartphones, and streaming media is impacting the ways we consume television. Statistics might imply that people are trending towards digital media consumption, but it doesn't mean that TV is dead – it just means that consumers now have more choices on how and when they consume TV. And if viewer behaviour is changing, broadcasting companies need to follow the audience.

This doesn’t mean they need to change their entire business model. However, it does require content organisations to gain a better understanding of how to deliver value to advertisers, while giving consumers what they want, where they want it and when they want it

The good news for broadcasters and content owners is that there are actually more screens to deliver content to. These ‘Zero TV’ households aren’t ditching their plasmas or LED TVs – they’re just ditching the coaxial cable behind them. They’re bringing laptops, tablets, and smartphones into the mix. And if you believe the rumours, we might even be squinting at an iWatch on our wrists in the near future.

Companies like Television New Zealand (TVNZ), the national broadcaster in New Zealand, are at the forefront of this trend. They continue to deliver quality content through traditional broadcast channels, but are also offering a fantastic experience through the internet on many devices. We’ve partnered with them to help them share their original programming, and to help them become one of the first in this region to offer premium US content through their catch-up service.

Today, Kiwis are now able to view all of TVNZ’s content portfolio. It doesn’t matter if they’re running an older version of iOS, regardless which of the hundreds of Android-based devices they might use. Nor does it matter if they’re using Internet Explorer instead of Chrome.  

Traditionally, ensuring ads were delivered across the myriad of platforms wasn’t easy, particularly for companies that tried to build the technology themselves. That meant these new screens weren’t being capitalised upon. But advertisers are now seeing great opportunity and have begun doing exciting things with video across mobile and connected devices.

 It’s not just broadcasters that need to deliver content to all these screens. Brands like Cricket Australia, Tourism Australia and Commonwealth Bank are also realising the importance of video and embracing the technology to deliver the optimal video experience to a wide range of devices. We’re entering a new era of opportunity.

The rise of the Zero TV household is happening before our eyes. But this is most certainly not the end of TV – far from it. For broadcasters, networks, and brands alike, this is a fantastic opportunity to extend their reach, expand their audience, deliver a better experience, and create new revenue streams to build a more sustainable business model.

Mark Blair is vice president of media solutions, Asia Pacific, for Brightcove.

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