There's been plenty of pomp, ceremony and brio in recent weeks at the new season launch announcements for MediaWorks and TVNZ. But behind-the-scenes, all is not quite so rosy, with a sharp drop in TV viewership since the middle of the year creating some concern.
Derek Lindsay, chair of the CAANZ Media Committee and managing director of DraftFCB Media, says there was a fairly dramatic drop starting in week 25/26 that has affected the overall viewership numbers significantly. The data can be cut a number of ways, of course, but, depending on the measure and demographic, he says total TV audience viewing is down between 10-15 percent since then.
It's thought the broadcasters, the CAANZ Media Committee and Nielsen had a fairly heated meeting to discuss the issue recently and look into what caused it. But Claire Harris, Nielsen’s managing director, media, says the company is confident the data from its 600-strong panel is robust and, "from a process perspective, nothing has changed in the TAM methodology this year".
- Check out Nielsen's investigation into the decline here.
In addition to its four-weekly rolling audits, she says it commissioned a separate audit of the panel. And she says the broadcasters' representative group has accepted that it was thorough ("happy isn't the right word"). So if it's not a problem with the data, why the drop? She says the reasons for the decline are many, and relate to both changing media consumption and improvements to the wider economy.
"People watch more TV during a recession. We saw this in New Zealand with audiences peaking in 2010 and declines year on year since. When it’s broken down to first half/second half, that pattern holds true, albeit with a larger decrease in the second half of this year."
PUTs are a calculation based on the number of people who tune in each day (reach) and the average time spent per viewer.
"Reduced average daily reach has been evident this year when compared to last year, keeping in mind that the Olympics was on last year [and the RWC was on the year before that]. When you start breaking it down by demographic, the reduced reach has been most notable against younger audiences (18-39), households with no kids and higher income homes."
In addition, retail spend and consumer confidence is increasing; food and beverages sales volume recorded its largest increase since 1995 (restaurants and cafes make up half this category); more people are travelling, with July departures setting a new record, up 15 percent YOY; and it was a mild winter and favourable spring.
"People are starting to spend money," she says.
And from a media perspective:
- Watching TV/movies via internet is stable overall, but shows 10+ percent growth in Sky homes and high income homes.
- 10 percent decline in renting a DVD; 17 percent decline in Sky homes.
- Cinema attendance is up eight percent overall, particularly moderate (2-4 last 6 months). There’s been a 40 percent increase in “moderate” for 25-54 with no kids.
- 20 percent increase in heavy internet (7+hrs per week) overall, and 30+ percent in both Sky homes and high income homes.
- 33 percent growth in attendance of a live performance. Over 70 percent for 25-54 with no kids.
- 25 percent increase for 18-34s attending a concert/live music.
- Growth in domestic travel over last six months for both business (+14 percent) and personal (+12 percent) reasons.
There's also an argument to be made about the quality of the content on offer, she says, because there was a lift in PUTs across all day during the America's Cup.
"That shows people will watch when there's compelling content," something she says TVNZ's chief executive Kevin Kenrick has been saying a lot recently.
For anyone outside this industry, people watching less TV is bound to be seen as a good thing; a mark of a country with a growing sense of optimism and inhabitants actually getting out and doing things rather than sitting inside. So what's the issue?
Given international trends of young people watching less TV and older people watching for shorter periods of time, Lindsay says the drop isn't entirely unexpected and he agrees that there are "lots of little things" contributing to the decline, but he says “what is unexpected is the level and speed of the drop”.
Media agencies and clients plan for a certain level of audience. If that audience doesn’t eventuate, and media agencies aren’t hitting their agreed audience levels, they are likely to ask the broadcasters for compensation, or 'make goods'. And at a time of high demand for ad space, there's not much of the good inventory to give away to do that.
“It's a cost issue," he says. "Clearly the implication is that clients are likely to be paying more for the same level of audience than they were before.”
Whether that's the fault of the broadcasters, or the fault of the media agencies, is up for debate.
In a statement, TVNZ’s head of sales Jeremy O’Brien said the comparative year on year decline in total viewership across the market over the past three months can be put down to “a number of causal factors”.
“We have an economy that is recovering, greater economic confidence is translating into more consumers spending on discretionary entertainment out of home, particularly consumers without children, and warmer than usual seasonal temperatures are adding to the increased out of home activity.”
When you view the total market audiences in a broader market context, he says the audience decline is off an unprecedented high baseline during the GFC and post-GFC when television viewing generally increases and it appears at the moment that the market has returned to pre-GFC audience levels seen back in 2007.
He also says TV continues to deliver unparalleled reach versus other mediums on a daily, weekly and monthly basis. And across all key commercial demographics, "TV remains the most cost efficient medium (CPMs) and New Zealand is by a good margin one of the best value TV markets globally".
“TVNZ has confidence that a strong schedule, as revealed at the new season launch, will continue to deliver the best share of available audience from the market over 2014, across TV and online viewership.”
UPDATE: MediaWorks got back to us with this statement from director of sales and marketing Liz Fraser
“MediaWorks has been the best performing network all year, by a significant margin, due to our high quality and compelling content such as The Block NZ, the X Factor franchise of NZ and US, The Graham Norton Show and 7 Days, to name a few. In the last four months, TV3 has had double digit growth in our channel share compared to the same time last year, across all four key demographics. Over recent months, for all people 25-54, PUTs are down 13% year-on-year, whereas MediaWorks is only down 6%. However, with Household Shoppers with children 0-14, PUTs are down 5%, whereas MediaWorks are up 12%.
What’s important for us all to remember is that TV remains the most cost efficient and effective medium in the market, even with the natural inflation that is taking place. No other medium delivers daily, weekly and monthly reach like TV. MediaWorks have proactively been in the market discussing concerns around PUT levels and are working closely with agencies and advertisers to ensure their campaigns are delivering results.”