Capturing the informal insights and commentary of a group of engaged, and interested youth viewers has enabled Arqiva to closely examine how viewing behaviours and expectations are evolving.

November 2015

Connected Broadcasting

Millennials Research

BackgroundIt has become a recurring theme among observers of the TV industry that young people have rejected broadcast television and ‘don’t watch TV any more’. The huge take up of alternative video formats and new devices is continually interpreted as evidence of this rejection. Recent analysis of viewing patterns and quantitative research from OFCOM1 and Thinbox2 has shown that linear still plays a significant role in the viewing mix for young adults. However, these reports show that over half of viewing amongst 12 – 18 year olds is non-linear VoD and OTT. While the new data has reset our understanding of ‘what’ is happening, what we didn’t know was ‘why’; what was motivating this shift; and if it would remain in the future?

The Millennials Research Project was conceived by Arqiva as a way to find the answers. It was an in-depth, qualitative approach to research the behaviour, thinking and decision making behind the numbers. To deliver it, we partnered with twenty young TV viewers, between the ages of 12 and 18, and we asked them to record every interaction with video content over the course of one month, from early August 2015.

To help them do this we created a unique, online media diary that they could engage with through their mobile devices, recording facts, thoughts and insights with text and video.The respondents were asked to record the different types of TV and video content they watched, the devices they watched it on, and how long they spent watching. They were also asked to keep a record of who they watched with, and where in the home they watched this content. Most importantly, we asked them why? Why they made the choices they made and what they thought about them.

Finally we turned our respondents into part of our investigative team. Armed with their own mobile devices, they conducted interviews amongst a selected group of their friends, broadening the research base, letting the respondents drive the subject matter and bringinga unique set of voices from the youth viewing community into our research.

The Millennials research projectCapturing the informal insights and commentary of a group of engaged, and interested youth viewers has allowed Arqiva to examine how viewing behaviours and expectations are evolving. Our work shows that Millennials are as engaged with content, formats, personalities and stories as ever. However, the importance of channel brands is diminishing. Instead, young people are showing increasing loyalty to programme brands, which they expect to be able to access when and where they want. We also uncovered an audience group with a growing variety of devices and services and their willingness to move between them is unprecedented. They are grappling with complex issues of viewing context – when and where to watch it – as well as trying to wrest control of content and devices when a significant percentage of viewing is still enjoyed with family and friends. The project confirmed a growing willingness to add new content formats into what they consider the television mix and to experiment with new kinds of video formats and services. The results also describe an audience group with a varied and nuanced TV viewing mix, as well as a contrast between weekday and weekend viewing – big screen TV in the lounge being dominant in the week, when family routines were most structured. But at weekends, when they have more time and family behaviour is not so structured, Millennials watch more video content outside the lounge on their computers, phones and tablets. However, as set out in this white paper, we believe the future holds significant opportunities for the industry if we can respond to the expectations it presents.

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1 OFCOM Viewing – July 2015.2 Thinkbox – Truth About Youth – August 2015.

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The big screen is still dominantThe most refreshing insight from our month-long research programme is that, contrary to the casual assertion of the mobile and new media industries, the big screen in the lounge is still a dominant device for Millennial’s relationship with TV. Whether by numbers of hours used, or first preferences for viewing – the size and resolution of the screen (and the proximity of sofas)

matters. As a group, our respondents described seeking out the biggest screen available for the content they wanted to watch at any particular time. But the lounge was an environment where the Millennials are rarely in control. Our project highlighted that while they sought the biggest and best screen available at any point,they were a group that continually had to make compromises.

In this new viewing mix the direct link between the big screen and linear TV has also been broken. When Millennials are in control of the big screen in the lounge, they use it to watch a much wider range of content formats than a traditional TV audience. Their chosen mix still includes live/linear, but with an equal mix of catch-up and SVoD, and increasingly any device the Millennials can plug into a screen. Live/ linear is still part of the mix when viewing on their own, but when solo they use double the amount of box sets and SVoD than

when part of a family group. It may be the big traditional screen they want, but they are not being traditional in their use of it.

Previous research into this cohort tends to focus on what they choose to do at the time when they are making their own decisions about content to view on their own devices. This obscures the fact that Millennials mainly live with their families and friends and much of their viewing occurs within these groups. What became clear from the comments was the extent to which Millennials participate in viewing on the main screen when family interaction is the main driver.

As witnessed by our respondents, TV is a mechanismby which families organise their lives and spend time together. Within this context the role of live/linear TV is important in a group. In terms of incidence, live TV was watched with the family 102 times across the study and alone only 42 times – mainly in the lounge, when respondents were able to grab control of the TV.This means that a large percentage of their live/linear viewing occurs when the Millennials are not in control and not the main decision maker. This ‘shadow viewing’ – watching what parents or others want to watch – is technically sub-optimal for them (in terms of programme choices) but they compromise because of the benefits of family. They enjoy TV as part of the family group.

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This was reflected in satisfaction levels. Watching with family and friends’ increased satisfaction with TV in general, but not necessarily for specific shows. As we report later in this paper, specific satisfaction levels around individual programmes were reported highest for shows where they had been dominant in the decision making. It also showed up in a difference between weekday and weekend behaviour. Big screen TV in the lounge was dominant in the week, when family routines were most structured. But at weekends, when they have more time and family behaviour is not so structured, Millennials watch more video content outside the lounge and more VoD OTT on their computers, phones and tablets. They want to be ableto access content when they want, where they want and these devices allow them to do that.

Going mobileOur chosen group was able to put the role of mobile devices around this ‘shadow’ TV viewing into more detail. Mobile clearly represents a chance for Millennial

viewers to create their own control space when viewing content that someone else had chosen. In this context ‘dual-screening’ with mobile content was a retreat from the sub-optimal choices on the big screen. Using social media or communications apps while watching main TV, allows them to remain part of the family or social group, joining the discussion about TV, but not committing to it.

Mobile also became a primary video viewing device when our Millennials were crowded out of the optimal viewing space – the lounge. In their own rooms they resorted to second choice devices. Use of ‘broadcast’ linear – viewed off an aerial or dish – in this context was very low. This reflects the basic infrastructure of viewers’ homes in the UK at the moment. Access to broadcast TV outside the lounge is limited. Where it exists it is most often to a Freeview device with little ‘youth viewing’ available. In pay homes, almost no young people have multi-room in their bedrooms – and therefore no access to the live/linear channels targeted at them. If they couldn’t watch their show on the big screen, the small one had to make do, and so mobile is most often a fall-back,not a first choice.

From linear to non-linearLive viewing was just over 20% of the total hours watched by Millennials, second to SVoD in terms of hours – across all devices. When watching content away from the TV set, our cohort were moving it to devices and personal places where they could control it on their own terms. Once away from the lounge, they were more likely to shift from linear to non-linear. They were also happy to use a variety of devices to follow the same content – starting an episode on one device and

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at one time, and perhaps finishing on another deviceat a different time. Some of our cohort reported using3 – 4 different devices around a single series or box set.

This meant that our cohort reported a huge amountof solo viewing, with video viewing on their own in their bedrooms by far and away the largest block by time. When Millennials are on their own, but without access to the big screen, then PCs and mobiles came into play. However, there is a clear hierarchy of content types and devices – the better the content the bigger the screen used. UGC is fine on a phone, bearable on a PC but not worth putting on a big screen. If short video clips were 15 minutes or less, a smartphone was the preferred device to watch the content. So SVoD (outside of the lounge) rated highly on PC or tablet, but would be watched on a phone as a last resort if it was the only thing available.

However across the total video viewing mix ‘traditional’ formats were complemented (but not necessarily replaced) by a wide range of other video types – music and game-based short form, UGC etc. It is inescapable that video has become the entertainment media of choice (and for genres like music, video has usurped much of the previous radio/audio consumption). Video consumption appears to have replaced a variety of non-TV activities that would have appeared in any research in previous generations. This also led our group to having the widest definition of what ‘television’ actually is amongst any audience group. The research showed the Millennial cohort lumping together movies, professional/episodic TV, professional short-form and fan based UGC into a single, all-encompassing definition of ‘television’ – it’s all TV to them. More interestingly, new content formats such as Snapchat’s Discovery channel, are as much a part of the mix as a TV programme. Their definition of ‘television’ is device, format and context agnostic, and most definitely not confined to the device in the corner of the lounge.

The cohort also had the widest definition of who they considered a TV provider. Apps such as Vevo, Twitch and YouTube were considered part of the TV provider mix and this was another driver away from the large screen – where these providers aren’t available – and onto PC and mobile. What was clear, as you will see later in the white paper, was that our respondents expected these content providers to migrate up onto the big screen in the future.

Social media played a less important role in discovery and choice than previously thought.Most of the main TV viewing choices (whether live, catch up or SVoD) were driven by family decision and discussions rather than outside sources. Previous experience and on-screen trailers were the dominant influencers with newspaper listings not mentioned at all by the group. Interaction with friends via social media was much more likely to govern discovery and viewing of short-form and UGC on personal devices, than professional content on TV. Once again, they were conscious that social media was absent from the big screen experience and expected this also to change over time.

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Enjoying TV?Built into the misconceptions about rejecting TV is an assumption that Millennials don’t enjoy traditional TV. This is clearly not the case. Firstly the TV industry should take heart from the fact that TV habits and viewing histories are still being built in the traditional ways – through family viewing and social engagement. In answer to the question “Please tell us the television or video content you enjoyed the most. What about this did you enjoy?” The most frequent responses included – ‘I watched it with family or friends’.

There was also an expectation of functionality and control with Millennials clearly enjoying the viewing experience more when ‘you have the ability to pause and rewind ’. Control of choices was also key to enjoyment. In answer to the question “Please tell us the television or video content you enjoyed the least. What about this did you not enjoy?” The most frequent responses included – ‘I didn’t pick it ’.

For viewing on their own, where they will have chosen what to watch, the complaints were more functional – the screen was too small for the content – or quality based – the image quality was poor or there was buffering – or more basic commercial complaints about interruptions from advertising.

The Millennials reported awareness and affection for programme brands in a manner familiar to other audience groups, but without the close association with the TV screen in the lounge. They also showed a weaker affection for channel brands and a much stronger affiliation with programme brands. They would also seek programmes out across different apps, rather than seek out a channel brand to review what was available. They had an expectation of access and control to those programme brands across multiple devices in a way that is quite new. So clips of X Factor on YouTube were almost as important as the show itself. More importantly they were able to build these experiences while drifting between a range of social contexts and locations in the home.

The futureWe asked our respondents to define their utopian TV service of the future. A glib summary would be to say they want and expect everything everywhere, however, that would ignore a key finding. As expected, the old TV and web boundaries did not make sense in their vision of the future, with an expectation of YouTube/Vevo style short form VoD mixed in with live linear a very common request.

Their descriptions clearly allowed for short form, app-based providers such as YouTube, Vevo and Twitch, to migrate up to the big screen experience. They want to change channel between ITV and a YouTube MCN as easily as changing to Channel 4. What this means for the EPG of the future was beyond the capabilities of our respondents, but the consumer outcome they wanted was clear.

There was also a universal expectation of control of the content, with the ability to move it between devices and rooms, and take it with them when not at home. They all spoke of alevel of connectedness between devices which the TV industry is only just planning to build.

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This is a generation that have grown up with technology solutions and they can’t see the barriersto achieving this.

However, the primary desire was not for more mobility or functionality (those things are a hygiene factor inthe TV service of the future), and that didn’t reflect their primary complaint – a lack of access and control to the main TV set. The only reason mobile and PC based TV is so big among the Millennial cohort is that they so rarely have control of the big TV.

So the key element of a future TV service was screen size and their primary desire was for ‘big’ TV and control. Our Millennials reported that their utopianTV outcome was a huge flat screen that they had complete control of – and in a room with sofas!

ConclusionThis research has busted the myth of a mobile-first, TV-avoiding Millennial audience.The assumption that young people default to the mobile as their device of choice was basedon a false premise and failed to take into account the complex family and social context in which young people watch TV. What we discovered through our research was a group of viewers who were as engaged with TV as any other group and who, given a choice, would be watching it on the biggest screen possible.

However, the evidence shows that when they have more time and family behaviour is not so structured, such as at weekends, Millennials watch more video content outside the lounge and more VoD OTT on their computers, phones and tablets. Given a free run at any device or any location, Millennials would choose the TV set if only they were able to access the content they want, when they want it. Currently the apps and services they can access on mobile devices and computers give them this flexibility.

They are also a group who define television in the broadest of terms and engage with video content in a variety of formats, contexts and devices. For them, the importance of channel brands is diminishing, instead they recognise and value the programme brands and formats and are adding new providers and services into the mix of what they define as ‘core TV’. Their vision for the future of TV is optimistic and inclusive. They want everything on every device and fully expect the TV industry to change to reflect their behaviour.

This is not an audience group that the TV needs to be scared of, but one for whom the industry will need to run fast to keep up.

Matthew NealeHead of Marketing, Satellite & MediaArqivamatthew.neale@arqiva.com

ContactsNigel WalleyManaging DirectorDeciphernigel.walley@decipher.co.uk