Broadcasters have no cause for panic over rise of non-linear TV

EL SEGUNDO, USA: Despite the growth of on-demand video and recording technologies such as the digital video recorder (DVR), the vast bulk of consumer television viewing time is still expected to be devoted to real-time, linear programming through the year 2015, according to the IHS Screen Digest TV Intelligence Service.

DVR, on-demand and other forms of nonlinear programming will account for only 15.8 percent of television viewing in the United States in 2015, up from 9.9 percent in 2010, with the remainder made up by traditional linear TV watching. In the United Kingdom, nonlinear will account for 12.7 percent of television viewing in 2015, up from 7.8 percent in 2010.

Nonlinear television is defined as non-traditional means of viewing that enables place- and timeshifting. This contrasts with traditional linear television, where viewers must watch a scheduled TV program at the time it’s broadcasted, and on the channel it's presented on.

“The rise of nonlinear television has struck panic into the television industry, with broadcasters dreading the impact of new technologies on their revenue streams,” said Richard Broughton, senior analyst, television, for IHS. “However, even in the leading countries for nonlinear television viewing—the United States and the United Kingdom—linear will account for the vast majority of television viewing through 2015. This means that for the television industry, DVR and on-demand viewing may not be as much of an imminent threat to profitability as feared.”

Other countries are expected to have even lower rates of nonlinear television viewing, including France, Germany, Italy and Spain.

The rate of nonlinear television viewing via on-demand services is actually trailing the usage of DVRs, which have entered the mainstream in the most developed markets. Already rolled out to one-third of U.S. television homes, DVRs by the end of 2015 will have penetrated almost half of all American households.

In contrast, on-demand services still suffer from a number of issues that have led to their underuse compared to DVRs. Content fragmentation and restrictions across different portals and services mean that for most consumers, on-demand services offer much less variety in content than an array of linear channels from a cable or satellite operator. This will be an important constraining factor in the future and as more households gain access to video on-demand services, one of the main limitations on consumer usage of on-demand.

A further reason for the limited penetration of nonlinear TV viewing is that TV broadcasters are taking steps that will help to retain viewers of traditional linear broadcasting by offering more high-definition (HD) content.

“Linear TV has not stood still as non-linear distribution mechanisms have developed,” Broughton said. “Alongside the evolution of Internet video and DVR technology, broadcasters have introduced HD channels, now received by more than 40 percent of US households. In contrast, the Internet in many markets still struggles to cope with HD content and the high bandwidths required for its delivery. Streaming HD remains relatively rare, and downloading takes time, diminishing the appeal for consumers.”