Switch to digital TV does not change old habits of average viewers

Pay-TV channels anticipate further growth

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By Jyrki Räikkä
     
      A new era! All change! Revolution!
      This was what we were told when Finland switched over to digital television, when the the analogue television broadcasts ended in the country a year ago.
      The last pockets of resistance were broken at the beginning of March this year, when the digital-to-analogue converters were removed from the cable network.
     
For a revolution, the change has been rather quiet. An average TV viewer continues to watch mainly the same kind of programmes as before, while viewing volumes have also remained more or less the same as previously.
      Nevertheless, the big picture has changed, says Lena Sandell, the Managing Director of Finnpanel, a company measuring TV viewing and radio listening in Finland.
      ”In my view, the market has clearly become fragmented. Today television viewing is divided between many more channels than before”, notes Sandell.
     
The most closely scrutinised results among the television viewing statistics gathered by Finnpanel are the channel share measurements - the ratings game.
      The figures show some seasonal fluctuation, but since May 2008 YLE's TV1 has been found on top of the ranking list, while MTV3 has fallen far behind it.
      In third is YLE TV2, which has also lost a number of viewers. When taking into account even Channel Four (Nelonen), the four largest channels jointly gather approximately three-fourths of the overall TV viewing time.
     
Television viewing continues to be mass viewing, claims Erik Bäckman, the head for audience insight at the Finnish Broadcasting Company YLE. He says that the main channels are protected by viewers’ old habits: the viewers tend to watch the large channels, and particularly the most popular programmes.
      ”People can’t be bothered to consider carefully what to watch, while often even those active viewers who search for specialities also watch the most popular channels and programmes”, Bäckman reports.
      He ties his views in with the discussion that has emerged within the culture and media business in the United States, where Harvard Business School professor Anita Eberse has challenged the "long tail" theory of Internet guru Chris Anderson with her own views on the importance of blockbuster hit products in the digital environment.
      ”Focusing on the most popular products is a basic force steering the media”, Bäckman explains, making reference to consumer psychology.
     
Nevertheless, many small channels have also gained more viewers. YLE Teema appears to be stable with 2.4 %, while FST5 remains steady at 1.4 %.
      Among the small channels, the one with the strongest growth is JIM, a sister channel of Channel Four, which has doubled its share of viewing over 12 months. The current figure for JIM is 3.1 %.
      However, the sister channels must not question the status of the main channel, says Pirjo Airaksinen, the Senior Vice President of programming at Channel Four.
      ”The international trend is to build channel clusters, aiming at gaining viewers from different target-groups. In our view, it is not possible to build other channels without maintaining one channel as a large full-service channel”, Airaksinen outlines.
      It is not easy to defend the status of the main channel. During the digital frenzy a year ago, Channel Four lost viewers as well as advertising revenue.
      ”Last autumn was the hardest in my entire career. Luckily, the trend turned for the better in the spring”, reports Airaksinen.
     
Aggregate viewing shares are not insignificant for commercial channels, even though these channels are much more interested in attaining popularity in the demographic of their own - all channels are trying to appeal to the under-45s. In addition, they are interested in gaining success in the prime time between 6 p.m. and 11 p.m.
      ”We pursue a multi-channel strategy. Cooperating with SubTV and the pay-channels, we try to keep the overall share of MTV Media at a good level”, stresses Taina Mecklin, the Research Manager at MTV.
      Mecklin is confident that the total results of the company will increase over the last few months of the current year, thanks to the popularity of Big Brother among other shows.
      ”Viewing shares cannot by themselves give us any absolute value because nobody pays us anything for them. Instead, we have to broadcast programmes when advertisers wish to promote their goods”, Mecklin concludes.
     
The fiercest digi-era competition is going on in the pay-TV market.
      However, the market itself is not easy to define, as the companies operating in the branch are not willing to disclose their viewing numbers, regarding them as trade secrets.
      The MTV pay-TV channels show the most distinct growth among the TV audience measurements conducted by Finnpanel.
      The viewing share of the cluster reached 3.0% this summer - no doubt largely thanks to live Formula 1 coverage.
      The majority of the other pay channels are hidden behind the item ’Others’ in audience statistics, with a share of around 10 %.
     
According to Finnpanel’s most recent TV audience measurements, some 26 % of Finnish TV households had access to pay-TV subscription broadcasts. However, the measurements were made as long ago as last November.
      Last autumn’s figures could be ascribed to the initial enthusiasm and novelty value, but the directors of pay-channels believe that the popularity will continue to grow.
      ”The honeymoon is over, but love will only deepen with time. Let’s assume that currently one in three households is subscribing to some kind of pay-TV package. I believe that in the future the proportion will be some 50 % of households”, says Jarkko Nordlund, the Country Manager of Viasat Finland.
      ”The markets are growing, and Finland is approaching the other Nordic countries. In Sweden the pay-channel penetration is already 60 %”, reports Caspar Berntzen, the Managing Director of Canal+ in Finland.
     
Pay-TV directors also believe that HD (high-definition) broadcasts will capture more market ground in the future. Moreover, the development is not likely to stop there: Internet TV is already on the doorstep.
      ”Broadband will provide a full duplex system, allowing communication in both directions and giving access to video libraries and hard disc recorders. To some extent, Internet television will become a significant distribution channel already in the course of next year”, Jarkko Nordlund predicts.
     
The majority of Finnish television viewers obediently switched over to digital television last year, even though it meant that they had to buy new equipment.
      At present the total number of digital decoders in Finnish homes is at least four million.
      However, tens of thousands of households were adamant that they would not buy the digital set-top boxes.
      ”According to the most recent survey from last May, three per cent of Finnish households have a television set but no digital decoder. It means 70,000 homes”, reports Finnpanel’s Lena Sandell.
     
The change is also reflected in the number of TV licences. At the end of July the number of valid licences was 1,909,166, while in the spring of 2007 the number of paid-up TV licences was 2,005,000. The decline over the past 12 months has been steady each month.
      YLE Director-General Mikael Jungner believes nevertheless that the trend will turn upward soon, as there are usually fewer television fee payers in the summer than during the rest of the year.
      Moreover, preliminary information from the Finnish Communications Regulatory Authority indicates that the number of television fee payers rose by some thousands, thanks to the Beijing Summer Olympics.
     
Helsingin Sanomat / First published in print 1.9.2008


Previously in HS International Edition:
  Financing YLE operations through digital TV smart card gets support (14.12.2007)
  Radio Extrem spared, TV channel Extra to be axed in YLE cost-cutting operation (28.11.2007)
  Sharp decline in number of TV licences after switch to digital TV (6.11.2007)
  Digital television era comes in tonight (31.8.2007)

Links:
  Finnpanel
  Finnish Communications Regulatory Authority
  Virtual Finland: Media

JYRKI RÄIKKÄ / Helsingin Sanomat
jyrki.raikka@hs.fi