In February this year, Ofcom published a proposed timetable for digital switchover.
As the UK moves inexorably towards the targeted date of 2012, so more and more of us are converting to a multi-channel experience.
However, while nearly 70% of UK households have some multichannel access, this is by no means to every set.
Let's look at the facts.
Only seven per cent of Sky's households have "multi-room"
subscriptions (Q3 2005 results)n despite over 60% of those same households owning at least two TV sets.
With some 20 million sets still to become digitally enabled (three times the total Freeview universe at the end of 2004), conversion offers more households the opportunity to buy Personal Video Recorder (PVR)n technology.
As hardware costs continue to tumble, PVR functionality will increasingly become the norm rather than exception.
Indeed, when Sky launches High Definition TV (HDTV) in 2006, PVR technology will be part of the package.
Natural replacement
Conservative forecasts put PVR penetration at 20% by 2010 – the cusp of a majority market. Some forecasts suggest PVR penetration at more like 30% in 2010. Beyond that point, the natural replacement cycle for video recorders will be the main driver: Dixons, for example, has stopped selling VHS recorders.
As in so many areas of the digital revolution, Sky leads the way with its Sky+ offer. Sky+ stands apart from other PVRs because it is completely integrated within the viewing experience via the EPG (Electronic Programme Guide).
To date, findings about the effect of PVRs have been based on so-called "early adopter" behaviour.
Sky+ early adopters have been famously enthusiastic about the innovation (some 40% of sales are reported to come from personal recommendation), with increases in total viewing levels and routine ad skipping among the most popular findings from this audience.
MediaLab –Mediaedge:cia's specialist research division – wanted to reach beyond these indications to find out whether these trends would be replicated as the mass market embraces PVRs.
We commissioned Basis Research to create a qualitative "early majority" panel – households who hadn't thought about getting a PVR but didn't completely dismiss the notion either – covering a spectrum of viewing types: five-channel terrestrial, Freeview, established Sky households and recent Sky converts.
We upgraded the TV experience for a sample of 20 households with either Sky+ (for Sky households) or Which? magazine's recommended Digifusion PVR (for Freeview and previously five-channel only households).
They were interviewed after two to three weeks with the equipment and then again after a further six weeks, in order to get an understanding of initial and "settle-down" behaviour.
Our study revealed three key findings of these new viewing dynamics.
? Not all viewers are the same: Households differ not only in their viewing behaviour but in their attitudes towards TV. Three types of viewers emerged: Hardcore, for whom the TV is central to household life and the PVR was a godsend; Moderate, whose TV behaviour changed with a PVR but to a lesser degree; and Selective – light TV viewers whose viewing behaviour changed little or not at all.
? PVR awareness, experience and champions: The speed and depth of PVR adoption are driven by three factors, each of which relates in some way to these three household types. Sky's seamless and apparently ceaseless marketing of Sky+ as an extension of the existing service gives Sky households much more awareness of PVR capabilities. Freeview households showed a lack of understanding of the offer.
The Sky+ handset, functionality and on-screen interface are natural extensions of a (familiar) Sky experience. By comparison, the Freeview model was less intuitive and integrated into normal viewing. Someone needs to champion the PVR cause in the household.
There are three types of champion: "Technophiles" – those impressed by gadgets; "Obsessives" – Hardcore individuals clearly motivated to enhance their viewing experience and "Household Managers" – in particular mums, who found PVRs very useful in settling disputes about the remote control and could also watch their own programmes away from domestic interruption.
New behaviour
In the absence of any such champion, i.e. the Selective households, PVR adoption was much slower and less deep. New behaviour included "Pig Out" sessions, for example, where viewers recorded a whole series of a favourite programme for watching in a single sitting.
? Ad avoidance habits: All of the sample households fast-forwarded ads during recorded programming.
The more selective (Freeview) viewers tended to be less motivated to skip ads. Hardcore households were using PVRs to cramas much programme time as possible on to the machine's hard drive and therefore most motivated to avoid ad breaks.
More new behaviours emerged. Ad break skipping became a competitive "sport" within households – who could skip the most of the break at the fastest speed without overrunning into the next part of the programme.
Similarly, viewers could add another layer of enjoyment to game shows like, Who wants to be a Millionaire? by pausing the programme to allow family members to answer before the contestant.
The "almost live" (i.e. after a temporary pause) programme became a disorientating space for people. Viewers tend to continue to watch ad breaks "as live" until a bad ad reminds them to skip through the rest of the break.
Interestingly for advertisers, almost no-one is deliberately sabotaging ad breaks in trying to catch up with live programming after pausing it. Even where the minority are doing this, it is not motivated negatively – it stems from the desire to squeeze as much content on to their machines as possible.
Programme sponsorship and on-air promotions take on increased importance for the viewer in navigating through their way through an ad break.
Sponsorship credits provide a natural reason to stop, while trailers provide a genuine viewer service, especially as it's easy for the PVR to record the programme from them.
PVRs will be the next "no going back" consumer technology, so understanding the new viewing dynamics is of paramount importance to advertisers.
There seems to be a disproportionate drop-off in ad viewing among heavier viewers. Where as any viewing decline is "bad news", the silver lining is that TV delivery in the future could be easier to balance between light and heavy viewers.
Our findings suggest that while majority PVR adoption will not be a nail in the coffin of 30- second spot ads, there is also "no going back" to strategies comprised solely of linear 30- second spots.
A number of different strategies emerge for advertisers within this context. Not all of them are viable, and individual advertisers' circumstances will suggest different priorities. You could ignore these findings, saying that the early adopter behaviour is just that – and won't extend to the majority.
However, we believe that PVR technology is intuitive, requires no disproportionate motivation or skill and whereas not everyone will adopt all functions, a broad majority will routinely avoid advertising.
If there's a marginal decline in TV advertising availability, then a sensible strategy would be to diversify a media portfolio to include other channels. TV solus strategies are now in a minority.
If there's less audience availability, we should make the most of the availability that remains. In particular, there is a call for low-interest category advertisers to develop engaging ads which viewers will accept as entertainment rather than skip as intrusion.
Response gathering
PVRs allow advertisers to take the viewer out of the linear broadcast stream via the "press red" interactivity without missing any of the programme they are watching.
Advertisers can employ a number of tactics to actively engage their consumers, including response gathering, sampling and promotional mechanisms.
Viewers understand the grammar of a break.
Increasingly, sponsor credits help viewers start and stop any ad break zipping, protecting the audience delivery of programme sponsorship.
The real potency of sponsorship, however, lies in the ability to associate the values of a consumer brand with the values of the programme brand and promote between the two.
The key findings
Not all viewers are the same: There are hardcore, moderate and selective viewers.
Someonemust champion the PVR cause in the household. Technophiles, obsessives and household managers are the three types of champion.
All of the sample households fastforwarded ads during recorded programming.
David Fletcher is head of MediaLab at Mediaedge:cia