From VHS to Netflix

TV in the 70's and 80's

I was born in the early 1970's, so I remember what it was like to have only three channels of television (four by 1982).

I remember when children's TV programmes had a countdown clock and slides for 5 minutes before a show would begin, and when channels ended transmission for the day.

I vividly remember the introduction of our first video recorder in the early 80's - a Sony Betamax VCR (a war eventually lost to the inferior VHS), and taking a trip to the local video rental store to hire a film you wanted to watch, and watching it whenever you liked, regardless of the TV schedule, long before Blockbusters came and went on the high street.

Today's TV is OTT

Today we consume films in very different ways. Yes, you can still watch movies on your bigger, wider, thinner, higher resolution TV sets, but we also have the power to watch whatever we want, whenever we want, wherever we are.

Last year OTT (over-the-top) video content moved prominently to centre stage. The shift from traditional TV continues, and broadcasters and operators have accepted OTT as the future, while the repercussions are affecting all areas of the business.

Meanwhile, consumers continue to demand change across the whole of their viewing experience ― from the content they watch, to the devices they use to watch it and the methods they choose to pay for it.

Video is not about to stop going `over-the-top' anytime soon, which could spell boom or bust for many in the entertainment industry. The OTT market is becoming more cluttered with a range of apps and services, from mass-market giants like Netflix, to niche networks targeting specific audiences.

Factoring in rising content costs with increasing competition, and with more platforms to launch from, the OTT race has only just begun.

There are only three major digital video providers that have become the standard platforms for watching movies and TV shows - Netflix, Hulu and Amazon. But Netflix is the giant, the most popular video service to watch film and TV shows online, followed by Hulu and Amazon in the US, according to a recent report from Hub Research.

Globally Netflix is even bigger. While Hulu doesn’t exist outside of the US, and with Amazon not operating anywhere else but the UK, the void is left wide open for Netflix, who ambitiously want to be in 200 countries by the end of 2017 as part of their global expansion plan, and that includes a potential launch in China.

We Hate Annoying Ads

But how is the advertising commercial model going to sustain, with annoying ads disrupting the pleasure of watching a film? In the old days of renting a VHS movie, we had the misfortune of sitting for 5 minutes pressing the fast forward button on the VCR to whizz through any annoying adverts before the film began (although these were mostly trailers for upcoming video releases).

In a recent survey which polled more than 30,000 online consumers in 61 countries, Nielsen’s Global Video-on-Demand Report reveals nearly two thirds of people who watch video-on-demand services say they would like to block the ads on them. 62% who watch VOD say online ads displayed before, during or after VOD programming are distracting, and 65% wish they could block all ads.

Neither Netflix nor Amazon have ads on their paid-for on-demand services, but others such as Channel 4 and ITV in the UK and Hulu in the US run ads. Adblocking has been growing rapidly in recent years, especially on desktops. While it is considered a greater threat to digital news publishers, it also poses a problem for ad-funded video services.

The survey of 61 countries did not specify what type of video-on-demand service it was, so the respondents could also be including ads on YouTube in their response. The questions were tilted towards programming more likely to be found on more TV-like services such as Netflix.

The report optimistically suggests that more relevant, targeted advertising might make the 65% of people saying they want to block ads “intentionally tune in for them”.

However, the survey also found that almost six in 10 respondents said they would be prepared to watch ads in return for free content, rising to 68% in North America. The survey also covered pay TV services, finding that the majority of those adopting video-on-demand subscriptions such as Netflix or Amazon Prime were not using them to replace pay TV such as Sky.

In total, nearly seven in 10 people in the UK pay for TV, but they are more likely to fork out for Sky than video-on-demand services such as Netflix. One in five have signed up to video-on-demand, below the global average of nearly a quarter and only slightly more than half of the 37% of those who pay for satellite TV such as Sky.

The survey also reveals only half (51%) of Britons online watch some form of VOD programming (be it long- or short-form content) compared to 65% of respondents globally.

Changing Viewing Trends

Nielsen vice president of product leadership, David Wong explained recent viewing trends that have shaped our viewing habits. "Young people no longer use physical media. That's not surprising; everybody is streaming," Wong said.

"When we actually take a look at video consumption on computers it's grown, almost doubling when you take a look at all different forms of video consumption. This was even downloaded video, but on computers it's gone up by 162 percent. VCRs disappeared. It's not shocking, but it actually was still being used just 5 years ago. The VCR was still being used, and now it's completely gone."

"Personalized and mobile options have taken us away from watching live TV, but we're more than making up for it. Despite all of this happening, we are seeing decreases in the amount of live television viewing," Wong explained.

"The amount of total video consumption is actually going up, so this is an interesting point which is that a lot of people talk about these days as being the golden age of television, and there's a lot of truth to that because despite the fact that people might not be tuning in during prime time, people are watching more television today than they ever have in the past."