Television is due to fall below half of all video viewing in the United Kingdom by 2023. Deloitte says that this heralds a new era for the video ecosystem as television will no longer be the dominant form of home video entertainment, at least for younger viewers.
Extrapolating data from 2017 to 2020, Deloitte forecasts that online video services will progressively take share of total live, recorded and on-demand video viewing from broadcasters.
As recently as 2017, broadcasters in the United Kingdom still accounted for nearly three quarters of all viewing hours. Deloitte expects that to fall to 49% in 2023. Correspondingly, online video services from non-broadcasters like Netflix will increase from 7% in 2017 to 31% in 2023.
Other forms of viewing, including other video on any device, and games consoles, are forecast to remain at about a fifth of all viewing.
The assumption is that as adoption of online video services increases, this will lead to an increase share of viewing. That does not take account of the varied forms of programming available from broadcasters, while other online video services are predominantly recorded narrative.
As Deloitte observes, predicting a decline in traditional television viewing is not controversial but the symbolism of broadcaster programming falling below half of all viewing in a major market could be replicated elsewhere around the world.
Video viewing is likely to become even more stratified by age. That will make it harder for advertisers to reach young adults through television, although it will remain the prime video medium for those aged over 35.
The ebbing share of television viewing is hardly terminal. While television viewing hours fell by 21% across all viewers in the United Kingdom between 2010 and 2019, advertising revenues declined by only 14%, from £5.8 billion to £5 billion.
Television is still the best way to aggregate the large audiences that matter to major brands. Although mass audiences have declined over the years, there were will 569 programmes with more than 5 million viewers each on ITV alone in 2020.
However, television viewing continues to fall and the cost per thousand viewers continues to rise, advertisers may move to alternative channels.
Deloitte concludes that for television to thrive, it will need to face the reality that it will not be the dominant form of home video entertainment but only one of many strong contenders for the attention of viewers.
The writing has been on that video wall for decades, although television has faced challenges in the past from other forms of viewing and still remains in remarkably good health for its age.
The TMT Predictions 2022 report is available from the Deloitte web site.