ITV's reluctant digital journey
- Summary:
- ITV's commercially-funded business model has been slower to adapt to digital broadcasting realities than the state-funded BBC.
We will take the view that is screen is a screen and a view is a view irrespective of what we’ve seen on.
So says Adam Crozier, CEO of broadcasting giant ITV, the main commerically-funded alternative to the BBC in the UK - and home to global hits such as Downton Abbey and Poirot - as he contemplates the increasing digitalisation of TV viewing, a trend that has significant implications for his advertising-funded operating model.
Earlier this week we took a deep dive into the digital direction and ambitions for the BBC. The BBC is funded by a mandatory license fee payment from viewers. As such the corporation has been able to adapt to the time-shift phenomenon of catch-up digital services more easily than its commercial rivals.
If 5 million watch Doctor Who live on a Saturday night, but a further 3 million watch it according their own schedule on catch-up, that doesn’t impact on the BBC in the same way that viewers not watching Downton Abbey live on a Sunday night would do. The BBC's after the final consolidated viewing figure, but ITV’s advertisers want bums on seats all at the same time and live.
It’s interesting that Crozier is quick to push the advertiser-friendly message that of ITV’s numbers:
98.4% of viewing is done on a television set and around 88% of it live.
ITV does have its own ITV Player catch-up service, but alongside the BBC’s iPlayer, it’s like comparing a push-bike to a top-of-the-range motorbike. Many cynically speculate it’s just not in ITV’s interests to deliver a superior offering here, but Crozier states firmly that the company is adapting to digital realities.
Hence his comment above, which in full concedes:
Video on demand viewing will in the long-term become part of consolidated viewing. And we will take the view that is screen is a screen and a view is a view irrespective of what we’ve seen on.
But he argues that for now, multi-platform viewing is at a very early stage and that measurement of viewing figures is not a standardised practice as yet with some forms of catch-up not counted officially to date:
Viewing through other devices [is] around three minutes thirty seconds a day. So it's like all of these things; we have to watch when we're talking about great growth levels that we don't lose sight of where it sits.
What's interesting so far is that, [UK ratings organisation] BARB, like Nielsen in the States, are looking at over in the medium term, I suspect two to four years, of finding a way to measure viewing on these devices, just as we do for consolidated ratings, overnight, seven-day, three days all those kind of things. So I think that is coming in the medium term.
What we try to focus on is making sure that we get to a position where our sort of share of viewing online is effectively around about the same as it is on linear TV. That's where we're trying to move it.
Crozier argues that, unlike BBC iPlayer, ITV viewers are more prone to using its equivalent as a way of watching live TV:
One of the more interesting aspects of our online viewing is I think about 20% of it is actually of the channel live. It's one of things we changed in our ITV player, was you sort of land on the live, because people increasingly just want to watch it like they watch TV. They don't want it to look at feel any different.
I think it's a good way for us to think that a screen is a screen, a view is a view, and people just want that flexibility. Although we say that viewing has gone down that little bit, remember that doesn't include all the viewing on these devices, so into in time that will get added back in. And it shouldn't be a surprise I think that if you can watch TV in more places like on trains or buses or whatever, you probably will watch more TV. So I think there's a common sense element to that too.
Progress?
Overall Crozier insists that ITV is making progress when it comes to digital:
If you look at the digital channels performance last year, in the first half of the digital channels were 10% down, in the second half of the year they were 2% down and year-to-date this year they’re 4% up.
So we have gradually turned those around. We’re focusing on trying to do the same for the main channel. It takes slightly longer there because of the type of programs, they take longer to come through the system. But as we look forward to what we’ve got coming in terms of high quality drama and sport, I think we can do so with some confidence.
He adds:
Our online viewing was up 26% year-on-year driven by number of different things, ITV Player app downloads were up 41% to 16.5 million. With improved distribution we’re now on 20 platforms and we very much support the key connected TV platforms that really make our content prominent.
We’ve got Freeview connected to come later this year, but if you look at the performance, it’s now in around 1.8 million homes versus 1 million [as of] the end of last year and our viewing request on eViewer up 88% year-on-year. So again a very fast growing platform for us.
All of which by the way is helping us to build a database which will be a great use to both in future we now have a 8 million registered users and that’s up about 129% year-on-year.
ITV is also looking increasingly to partner deals to spread its digital reach, such as a 4 year deal with Sky, which covers all their various platforms including GO. That’s already seen ITV video on demand viewing on the Sky platform rise by 113% year-on-year.
Then there are what Crozier calls “new models for content creation distribution” such as with Cirkus, a Scandinavian SVoD aggregator platform and moving onto YouTube:
We’ve launched 12 short form channels on YouTube and the plan is to have launched 22 by the end of this year. It was interesting as of the 35 million views on those channels, 63% is 18 to 34 [year old viewers]. So we are attracting the kind of people into those that we wanted to.
Overall, there's a final takeaway that gives room to assume growing enthusiasm for digital. Sales from ITV’s online, pay and interactive division were 30% up to £153 million. For a commercial TV broadcaster, that's the sort of thing that makes you sit up and take note.
My take
Regardless of my doubts about some of the BBC's ambitions - see here - we have previously argued the case that the BBC has some serious credentials as a digital organisation.
I'd find it hard to make the same case for ITV at present. Trying to use the ITV Player catch-up offering, particularly in its tablet app form, involves wrestling to get at content via a particularly unfriendly interface.
Things are going to have to change - and I suspect rather more quickly than Crozier would like.