Monday, 25 June 2012

Why Do People Use the Internet?

Most broadcasters have spent a great deal of time trying to develop an internet strategy.  The CBC in particular seems determined to adopt the internet as its primary distribution mechanisim.  Here we re-visit some data trends and examine some new ones to better gauge the impact of the internet. 

Even when the internet was "dialed up" through the phone and incoming calls were cut off there were pundits claiming that the internet would result in the demise of TV, not to mention killing radio, newspapers, bricks and mortar stores, banks, the post office and pretty much every other human activity, except eating and sex.  The decline of newspapers and a reduction in snail mail are real and undoubtedly caused by the internet.  The internet has affected almost everything that deals with the printed word.  But, is the internet really taking time away from TV or radio?

Our ten-year study of media use shows that the internet is not nearly as pervasive as traditional radio and TV.  99% of people use TV and radio at least once per month but not everyone uses the internet. The chart below shows the trend in the percentage of Canadians using the internet and downloading/streaming of music (and video) on the net at least once a month.

Even by the mid-2000's the internet had a very substantial monthly 'reach', the proportion who used the internet for an hour at least once per month. Two-thirds of Canadians were using the internet at least once a month in 2004 and it grew to about 4 in 5 by 2009. However, internet use on a monthly basis seems to have stabilized at about 80% and has not grown in the past two years.  There may always be a group of people of a certain age and/or income group who will not use the net. 

A similar pattern is seen in downloading/streaming audio and video from the net which was practiced by about 1 in 5 people in 2004.  It grew to about 40% by 2009 but it too has stabilized in the past two years.  Barring some unforeseen new technology (and a reduction in data costs), it would seem that downloading/streaming may peak at levels well below overall internet use.  If devices that made downloading simpler and more intuitive, such as Apple TV and Google TV, become more pervasive, then internet listening/viewing may become more common.

In the chart below we track the weekly hours spent using the internet (at home, work or elsewhere). The surveys reveal that internet use basically doubled from 2004 to 2009, from just less than 6 hours per week to about 11 hours per week. But in the past 3 years internet use has stabilized at 10-11 hours per week. It may not grow much from this point on, although video streaming to the TV set has the potential to increase but is this internet use or TV viewing? 

TV use has been measured by the Media Trends Survey for ten consecutive years and it has been unaffected by the internet, remaining at about 19 hours per week through the decade, a decade when not only the internet but also many other media choices were introduced.  19 hours per week is less than ‘Nielsen’ ratings say but it is probably a more realistic estimate of the television audience.  Statistics Canada’s 2011 General Social Survey, conducted every 5 years or so and designed to measure how Canadians spend their time, mirrors the results of the Media Trends Survey.  Comscore data on total internet use has shown a very similar pattern to the results of our surveys. All the data point to one conclusion:  TV is not affected by the internet and continues to play a more important role in the lives of Canadians than the internet.

Since 2006 we have tracked cell phone/smartphone usage and the results are very telling.  Yes, roughly 3 in 4 Canadians now have a cell phone or smartphone and more and more people use it to text and send photos but less than 1 in 10 download music or video with their mobile device and there is scant evidence that downloading music/video to your phone is considered important or likely to become mainstream any time soon.

What about other new media?  In our 2011-12 survey we began tracking use of Facebook, Twitter, Apple TV, Netflix, etc.  Apple TV use barely measured in the survey while Netflix had a substantial penetration of about 1 in 12 people, about the same as Twitter.  A surprising 13% of people indicated they owned a tablet computer but the much more established iPod technology is still only owned by about 1 in 3 Canadians.  Only Facebook, which is used by about 1 in 2 people, comes close to being used by a majority of Canadians. 

What about CBC radio and TV?  Our surveys show that CBC Radio 2, even in its reduced state, is used for at least an hour per month by more people (9.0%) than Twitter (7.3%) or Netflix (7.6%).  (That’s pretty cool but generally ignored by the media.)  CBC Radio 1 (31.4%) and CBC News Network (33.0%) have monthly usage levels equal to that of the iPod.  (Maybe an IPO is in the works?)  CBC TV is a monster, used by over 70% of Canadians on a monthly basis. (Somebody call the Competition Bureau.) 

The Media Trends Survey has been conducted for ten consecutive years and has surveyed over 15,000 Canadians in total in this period. It is the only survey to have measured media use and attitudes continuously over this decade. The Media Trends Survey is not sponsored by any one industry or affiliated with a media company.  Therefore, the surveys are scrupulously designed not to bias respondents into favouring one medium or media outlet over another.  Barry Kiefl’s blog can be found here.

Tuesday, 12 June 2012

Local TV News re-Emerging?

For decades it has been believed that local TV news anchors a station in a community and plays a major role in building audiences for other programs in the schedule.  In an earlier post we saw that CBC TV local news in the winter of 2011-12 seemed to have turned a corner of sorts.  CBC TV local news scored its best results in a decade, with about 1 in 5 Canadians saying it has the best local news.  Support had shrunk to less than 1 in 10 under the guidance of the last management team.  Still well back of CTV but the gap between the two has shrunk considerably.

In 2011 CTV was the clear leader in local news, chosen by some 35% as having the best local news programming (see chart). CBC was second with 21%, as mentioned its best year in the last decade, while Global had 18% support.  CITY TV, which is not available to the entire country like CBC or CTV, had only 6% support, as did CTV Two.  Whether it is a combination of broadcasters like CTV reducing its local news or CBC improving its local coverage, the result is a positive one for CBC TV.

One important factor is that CBC has had access to the CRTC LPIF fund the past two years.  LPIF accounted for some $40 million in funding for CBC in 2011 and Mother Corp seems to be using it with good effect.  The chart below shows that CBC's local news actually lead CTV in 2011 in several important population groups.  CBC TV was a big winner in homes that depend on over-the-air TV reception with more than 50% choosing CBC as having the best local news, crushing CTV and Global in this group.  CBC local news also leads CTV among CBC radio listeners, users and Netflix subscribers.  CBC, tellingly, does better among males than females.  Facebook and Twitter users are average in their support for CBC.  Twitter users, perhaps because the sample is quite small and so results should be taken with a grain of salt, have an unusual affinity for CITY TV local news.

The Media Trends Survey has been conducted for ten consecutive years and has surveyed over 15,000 Canadians in total in this period. It is the only survey to have measured media use and attitudes continuously over this decade. The Media Trends Survey is not sponsored by any one industry or affiliated with a media company.  Therefore, the surveys are scrupulously designed not to bias respondents into favouring one medium or media outlet over another.

Tuesday, 5 June 2012

An Open Letter to BBM (Bureau of Broadcast Measurement)

March 26, 2012
Elmer Hildebrand,
Chair, BBM,
1500 Don Mills Rd.,
Toronto, Ontario
M38 3L7

Dear Elmer:
As a current member of BBM, and past member of BBM’s Board, I wish to formally complain about certain business practices of BBM and would like to suggest changes in BBM’s constitution as well as the make up of its Board of Directors.

A client of CMRI’s, XXXX, was a BBM TV member 3-4 years ago and received analyses of BBM data from CMRI. At some point XXXX’s need for BBM data ceased. In error they neglected to inform BBM that they would not be renewing their BBM membership by the required July 1st date, sixty days before the start of the next broadcast year. BBM assumed they were renewing and sent an invoice for the next year of membership. I understand that subsequently several exchanges of correspondence took place between XXXX and BBM with the former explaining each time that they had not signed a membership agreement for the year in question, nor received any BBM data and that unfortunately the 60-day notice requirement had gone unnoticed by their administration officers.

This year XXXX had a requirement for BBM data. When they approached BBM to renew their membership, XXXX was told by a BBM representative that unless they paid the fees for both the current year and the year that they did not receive BBM data, they would not be permitted to join BBM. Denying access by refusing 2012 membership seems an ill-advised business practice, since XXXX will not join BBM at all under these circumstances. Many members of BBM would presumably ask why BBM would turn away additional revenue.

I am aware of a substantial number of other TV producers who have had similar or related problems gaining access to BBM data. When this particular case arose I came to the realization that BBM’s constitution and Board is not representative of the TV industry in 2012. In my view the current tri-partite make-up of BBM representing broadcasters, advertisers and agencies, all of whom have voting rights and Board membership, does not reflect the basic components of the TV business today.

When BBM came into existence broadcasters were responsible for the great majority of the content on their stations. Today, independent TV producers account for a large proportion of the content on all private and public TV broadcasters. Yet, BBM’s outmoded constitution relegates producers to associate membership and they are denied voting rights and Board membership. Given the central role they now occupy in the broadcasting business, it only seems fair and equitable that producers be allowed full voting membership and a voice in the policy and future direction of BBM.

Broadcasters pay the majority of BBM survey costs and they pay to measure the audience to all programs in their schedules, including those of independents, yet the independent producer cannot readily access BBM data. Many independent producers are being denied access to BBM data due to BBM policies such as the ‘negative option’ issue experienced by XXXX and especially the relatively high fees for membership. Advertising agencies and advertisers pay relatively very little, basically token fees in the case of advertisers, to access BBM data and in my view independent producers should pay less, or a nominal fee given that broadcasters have already paid to measure the audience to their programs. Most broadcasters will not share audience data with independent producers. Some share limited data reluctantly. There are several reasons for this, including the fact that broadcasters negotiate licence fees with the producers who might benefit from knowledge about the audience performance of their shows. The licence fee paid by broadcasters is usually only a fraction of the actual cost of programs.

The current situation finds the great majority of Canada’s TV producers unable to properly study and understand the public’s response to their programs (which are usually funded by tax dollars either from tax credits, the Canadian Media Fund or publicly-funded broadcasters). In my view this is a major public policy issue that has been hidden from view due to the decentralized nature of the independent production industry. I would like to put to the Board a proposal that would amend the constitution and offer full BBM membership to independent TV producers and at least three of the eighteen positions on the Board. (Broadcasters currently have 12 of the 18 board seats and are therefore in a position to control BBM policy and fees.) I believe this would go a long way to ensuring that producers’ interests and those of the public they serve are in future reflected by BBM.

Thank you and I look forward to your response.

Barry Kiefl,

Note to readers: BBM responded on April 4th, saying that the proposal for Board representation "is not an option under our current by-laws. We are going to review this process in the near future and will present your request to the appropriate Committee at that time."

Monday, 4 June 2012

Why Do People Listen to the Radio? (Part 2)

Who can forget when they first became aware of radio? My first exposure as a boy was a riveting play about giant ants which consumed everything in their path, including people. The horror was as real to me as to those who listened to the original War of the Worlds' broadcast. Our first radio experience is usually associated with the spoken word.  The human voice is the primary feature of the radio that attracts listeners.

Male voices, female voices, local and foreign accents; old and young, intelligent, witty, knowledgeable, worldly, dignified, average working people's voices, considerate, tolerant, angry, bellicose, excited, sarcastic, remorseful, soothing, funny, sad, sexy, authoritative, energetic, inquisitive, opinionated, mocking, gossipy, condescending voices, the human voice is the essential feature of the radio listening experience. The voice, expressing facts, ideas, meaning and emotions, is compelling and it draws us to the radio.

Voices on radio tend to be more natural and intimate than on TV. Radio is conversational, often filled with interruptions, short pauses and other features of a normal conversation, whereas TV hosting and interviews are more scripted and formulaic. Michael Enright often says to his guests, nice to meet you on the radio, something he wouldn't do on TV. In TV the players are more conscious of the camera, which represents the audience, and people tend to perform for the audience. The radio audience is in the background, unobtrusive.  

The spontaneity of radio is another critical feature that draws the radio listener. Music, uninterrupted by a host and other spontaneous elements, is not an appealing alternative. On the radio the very fact that the listener doesn't quite know what's coming next is a major attraction. Radio, more than other electronic media, attempts to break with tradition and cross boundaries: pop music when it was sinful, outrageous hosts, sex talk, call-in shows were all invented for radio.  My favourite radio host here in Ottawa was until recently CFRA's Michael Harris, a journalistic encyclopedia, always able to surprise you with his insights. Radio is here-and-now, telling the listener the time of day, the weather throughout the day, when community events are to take place and continually makes other chronological references. There are references to music or interviews "in the next half hour" or "after the news at the top of the hour."  Radio listening is a live, current experience, placing the listener in time and space.

There are some in the radio business, most recently the CBC, who seem to think that internet streaming of music can compete with radio. An interesting experiment and worth doing, yes, but not even close to radio. In the first part of this post we looked at data provided by thousands of Canadians from a national representative sample to show that internet downloading/streaming of music had seemingly peaked and was unlikely to reach the universality of radio any time soon. But there are some sub-groups in the population more likely to download/stream.

For the past decade CMRI's Media Trends Survey, the only survey in Canada that has tracked attitudes and usage of TV, radio and the internet continuously in this period, has asked Canadians to report how they use the electronic media.  99% of people use TV and radio at least once per month but not everyone uses the internet or streams music. The chart below shows the trend in the percentage of Canadians downloading/streaming of music (and video) on the internet for an hour at least once a month among different population groups in 2011-12.

Interestingly, there is no significant difference between men and women when it comes to downloading/streaming. However, as expected, there is a substantial difference between younger and older Canadians.  Persons aged 18-34, who account for 29.7% of the population, are far more likely to stream; 65.3% of them do so.  Older people, aged 55-plus, who account for roughly the same percentage of the population are far less likely to stream, only 17.8% do.

There are other groups in the population more likely to stream internet content, as shown in the chart below.

Twitter users, iPod and iPad owners and tech-savvy people who own smartphones are more likely to download/stream music and other content.  Note that only 7.3% of everyday people actually use Twitter.  CBC Radio 1 listeners, who make up 31.4% of the population are not heavy streamers in relative terms; 40.4% download or stream, about the average.  CBC Radio 2 listeners, who represent about 9% of the population, are also much less likely to download/stream from the internet than techies; less than half do so.  Thus, a CBC music streaming service, as was recently launched, is not a viable replacement for CBC Radio 1-2 listeners.  It may be an interesting niche service to attract a small number of new listeners but it is not an alternative to CBC Radio.

A week after launch the CBC music streaming service reported that about 60,000 people had downloaded the free app, about the number of people who live in Fort McMurray, Alberta, and this was after being heavily promoted on iTunes, CBC Radio and TV and many print outlets that week.  How many apps do you have on your iPhone or iPad that go unused?  The numbers are an early indicator that this is a limited market.

By the way, CBC listeners here are defined as persons who tune to Radio 1 or Radio 2 for at least an hour per month; so the monthly audience 'reach' of Radio 1 at over 30%, or some 6 million Anglophone Canadians, and Radio 2 at just under 10%, or roughly 2 million Canadians, is substantial.  Audience reach, using a minimum time period such as one-hour, cuts through the dazzling (and sometimes misleading) statistics that techies use to tout web services such as page views, hits and unique visitors (sometimes based on as little as a few seconds of use in a month).  Reach based on an hour of use is a much more telling metric for rating the impact of a service.

CBC programmers must be cognizant of their audience and not risk alienating the large CBC radio following that has been cultivated over many decades.  CBC radio listeners, who are attracted to the essential features of radio, including CBC's program hosts that speak to and for them, on the easily accessed, anywhere medium of radio are a treasure that CBC should value.  The only thing that really matters in radio is your audience.

The 2011 results are from CMRI's Media Trends Survey conducted November-December 2011 among a representative national sample of approximately 900 Anglophone respondents aged 18-plus.  Margin of error +/-3.3%.  The Media Trends Survey has been conducted for ten consecutive years and has surveyed over 15,000 Canadians in total in this period.