How Catch-Up and Restart TV Features are Increasing Subscribership and Revenue
With the rise of online streaming, allowing audiences to view video content whenever they like, the landscape of traditional linear television is shifting. Time-shifting, that is.
Time-shifted programming (also called “deferred” or “nonlinear” programming) has become a compelling TV component for both consumers and service providers. It comes in various forms - you may recognize it as a “Pause” capability allowing you to pause live TV, or perhaps as a DVR or PVR feature that uses a set-top box or remote storage to record programs for future viewing. Time-shifting is also manifested as a “Catch-up” function allowing you to go back in time to watch shows that have already aired.
Time-shifted TV goes by many commercial names. You might be familiar with these time-shift features, presented by various service providers from around the world:
Restart TV On Demand Look-Back Replay TV TV Archive Catch Up TV
Flashback AnyTimeTV Free VOD Now 72 Hour Rewind
Although it’s a relatively new component of TV, researchers have begun to explore the changes in consumer behavior, subscribership, and revenue that accompany the launch of time-shifted TV services. Why are service providers rolling out time-shifted programming? You’ll discover some of the top reasons below:
1. Positive impact on ARPU (Average Revenue Per User)
With streaming services offering attractive pricing and flexibility to consumers, cord-cutting is a reality for traditional TV operators as their audiences shift to solutions like Netflix and Hulu. There’s no question that traditional TV needs to make changes to its delivery, features, and pricing in order to continue to attract subscribers in this competitive market. Some measures are seen primarily as ways to reduce subscriber churn, but it appears as though time-shifting may go beyond, in terms of benefitting TV operators.
A preliminary study of a large European operator found evidence that the introduction of time-shift TV not only increased the rate at which consumers joined the service, but also the rate at which current subscribers decided to upgrade their service. Although this preliminary study was conducted on a relatively small scale, evidence that time-shifting can both increase the rate of new subscriptions and of upgraded subscriptions (and therefore, ARPU) is a compelling reason to consider time-shift features.
2. Attractive to customers
Over and over again, we see that consumers desire flexibility to have whatever they want, whenever and wherever they want it. Do they want time-shifted content? Apparently, they do. As an example, take the case of Swisscom TV - even before this service provider launched their new 2.0 version in 2013 that focused heavily on time-shifted offerings, 30% of all assets viewed were viewed in a time-shifted format. Their Strategy and Innovation Head, Peter Fregelius, commented that they’d expect their time-shifted content to comprise near 50% of all viewed assets with their 2.0 launch.
Add this consumer desire for time-shifted flexibility to the fact that consumers are known to willingly switch providers in order to get lower pricing, better quality, and added features. A study by Norwegian researcher Bjøndal shows that most consumers have been subscribing to their current TV service for just 5 years, indicating a dynamic market: customers are happy to jump ship to a different service provider when a better option comes along.
That said, as time-shifted viewing is an increasingly popular way for customers to view their content, service providers who include it in their offerings may lose less of their subscribers to their competitors.
3. Can increase overall consumption of content
Several studies show that time-shifted TV decreases the amount of time people spend watching traditional linear content, while it increases the overall amount of TV they watch (Australia’s ThinkTV shows this trend in this table, in addition to various graphics displaying the growing use of their “Catch Up” time-shift feature on their website). One preliminary study showed that this increase could be as high as 20%.
Studies have also recognized another trend in time-shifted viewership: when viewers are given flexibility to watch their preferred content anytime, they tend to opt for prime-time content , no matter the time of day (choosing to skip the non-prime-time content). This means that time-shift abilities typically result in a concentration of prime-time content viewership, increasing the value of prime time content, especially in terms of advertising.
4. Can increase ad viewing
Advertising revenue plays a major role in broadcasters’ business model (although with the advent of satellite, cable, and IPTV, service providers also rely on subscription fees from their Pay-TV services in addition to advertising revenue from free-to-air content). The question of “advertisement avoidance” has remained a central focus in the discussion surrounding time-shifted TV: With the ability to record and replay content on their own, are consumers also skipping the ads? Digital communications researchers Abreu, Nogueira, and Becker don’t seem to think so. They answer this question in their recent 2016 study:
“Non-premium TV stations fear that the reduction on linear TV consumption will lead to a reduction on advertisement value, thus having a negative impact on revenue. However, it has been shown that not all users skip advertisements, and that advertisements get up to 44 % more views due to time-shifted viewing.”
It appears that time-shifted TV not only increases the overall amount of media consumed, but is also increases exposure for ads.
5. Adaptable for various business models and technical requirements
In other words, time-shifted TV is not a “one size fits all” solution. Service providers benefit from an open range of options when it comes to rolling out their own version of time-shifted offerings. The local regulations surrounding recorded and replayed content vary, as do requirements from the content providers and the rights associated with any particular asset. Service providers have the ability to offer time-shift services of varying degrees - from a simple “Pause Live TV” function to a function providing access to all aired content from the past week. Likewise, some time-shifting may rely on personal storage devices (this is often the case with DVR, but not always), while some rely on remote network storage or cloud storage.
In other words, time-shifting is not a standardized feature, a fact which allows service providers to choose the arrangement that works with their regulations, technical specifications, and customer base.
There’s something to be said for popularity here. At first glance, we judge a restaurant by the number of cars in the parking lot at dinnertime; likewise, customers judge the value of their TV subscription based upon its popularity and the popularity of its features.
Examining the case of Swisscom TV, researchers Abreu, Nogueira, and Becker explain that “If [time-shifted] TV were a TV station, it would be the most popular show on Prime Time,” - a bold statement about the overwhelming popularity of time-shifted TV.
In other words, in a world where linear and nonlinear media is quickly converging, technologies like time-shifting are here to stay.
Info for links and footnotes:
Abreu, J., Nogueira, J., Becker, V. et al. Telecommun Syst (2016). doi:10.1007/s11235-016-0157-3