Buddy, Can You Spare Some Time?
The Wall Street Journal
By Martin Peers
Like most American families, the Koepke family of New York City spends at least a little time every evening relaxing in front of a screen. While one child thrills to a PlayStation videogame, another instant messages friends. Peter Koepke and his wife, Nicky, divide their time between shopping or paying bills online and watching TV.
Times have changed since families sat together during the evening to listen to the radio or watch a single TV set. Now, that concept is so unusual that TV executives have a special term for it, "co-viewing" ("American Idol," for instance, is a co-viewing show).
Television has "become background noise," says Susan Young, a 46-year-old mother of two from Maplewood, N.J. Her boys, 9 and 13, watch about an hour of TV a day during the week, sandwiched between homework, sports, religious school and piano lessons. But when they watch TV, they're frequently on the computer or playing with a toy at the same time. It is videogames they really prefer, so much so that they're only allowed to play them on the weekend, when the television becomes less of a focus. "Regular TV doesn't hold much appeal," Ms. Young says.
Late last year, TV executives bitterly disputed a Nielsen Media Research study that found young men were watching less television and spending more time playing videogames or watching DVDs. But that was just the tip of an iceberg that could rock the entire media industry in coming years. The battle for Americans' disposable time – among a vast proliferation of entertainment products and media channels – is becoming even more pitched than the battle for their disposable income. Indeed, in many key demographic groups, time is scarcer than money.
The scramble for consumer attention is having ripple effects for other industries as well, particularly technology and advertising. So much is changing so quickly that NBC's head of research, Alan Wurtzel, predicts the period of 2003-2005 will in the future be seen as a "watershed change… the beginning of a very different era."
Media options aren't just competing with each other. Consider this: Since 1973, the median number of hours that people say they work has jumped from 41 a week to 49, according to Harris Interactive, which does an annual survey of adults about their work and leisure time. That has mostly come out of people's leisure time, which has dropped from 26 to 19 hours a week over the same period, Harris reported.
And people have a lot more to crowd into those diminishing hours. Parents can no longer let their children play unsupervised and instead ferry them from soccer game to hockey practice. Cellphones, pagers and BlackBerries allow the demands of the office to intrude everywhere, any time of day. A dizzying array of entertainment options have invaded homes, from videos and DVDs to videogames, personal computers, the Internet, MP3 players and hundreds of new TV channels. Even radio is splintering, with satellite radio, often commercial-free, competing with traditional channels.
Media companies are scrambling to adapt to the new realities. While viewing of traditional broadcast TV is down dramatically in recent years, people are spending a lot more time watching cable and satellite channels, lifting overall household viewing over the past decade. Not surprisingly, the companies that own broadcast networks are buying up major cable channels. General Electric's NBC now owns Bravo and has agreed to buy USA and Sci-Fi. Walt Disney Co., which owns ABC, also owns ESPN and ABC Family channel. Viacom Inc. owns MTV and Nickelodeon along with CBS.
As videogames siphon off young male viewers, some media companies may expand into that industry, possibly by buying existing videogame makers such as Electronic Arts, maker of such popular games as The Sims and Madden Football. Time Warner's Warner Bros. recently announced formation of an interactive gaming division. Viacom Chairman Sumner Redstone has accumulated a significant personal stake in Midway Games Inc., a videogame maker.
Technologies that help consumers manage and maximize their own time are gaining popularity, including cable-TV "on-demand" services that let viewers order movies or TV shows on their own schedule rather than a network's. The spread of low-cost DVD players is having a similar effect, as is TiVo and other "personal video recorders," which also let viewers skip through commercials. Such devices are now in roughly just 2% of U.S. households but growing fast, and increasingly available as part of cable-TV boxes.
The ability to zap commercials, combined with the fragmenting of audiences, is forcing many marketers to look for new ways to reach consumers.
"In 1965, 80% of 18- to 49-year-olds in the U.S. could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to produce the same result," Procter &Gamble's global marketing officer, Jim Stengel, told the conference.
"This is not about the death of TV. It's about the slow death of the 30-second commercial," says Rishad Tobaccowala, an executive vice president in Starcom Mediavest Group's media planning and buying group. Starcom recently surveyed a significant portion of all households with a TiVo. "Fifty-five percent of the commercials were skipped," Mr. Tobaccowala says.
"Clearly the advertising model is going to change," says News Corp. Chief Operating Officer Peter Chernin, who says possible changes could include more variation in length of commercials and different kinds of sponsorships. At the same time, he says the TV industry will have to find ways "to get consumers to pay directly" for shows, as is beginning to happen with the release of TV shows on DVD. Still, Mr. Chernin adds that the major broadcast networks account for 45% of viewing, a "remarkable testament" to the strength of the business given the proliferation of choices over the past quarter-century.
But overall TV viewing statistics mask changes within different sectors of the population. More affluent households attractive to advertisers are also more likely to be Internet users. And Internet-using homes watch less TV than people without the Internet, according to UCLA's Center for Communication Policy, which has tracked Internet users' television viewing over the past few years.
Advertisers already are increasing their spending on other venues – like movie screens, fortune cookies, baggage-claim conveyor belts and individual pieces of fruit. The country's leading marketers spent $5.2 billion on billboards and posters in airports and ads on taxis, buses, trash cans and elsewhere in 2002, double the level in 1990, according to Outdoor Association of America, a trade group based in Washington, D.C. A media firm owned by Kirshenbaum Bond &Partners recently placed round, black stickers advertising "Traffic," a new USA Network miniseries, on 50,000 one-dollar bills and sent them into circulation in New York and Los Angeles.
In the scramble for consumers' time and attention, products that can be viewed, listened to or otherwise consumed on the go, and concurrently with others, enjoy a huge advantage. Multitasking is clearly spurring sales of Apple Computer Inc.'s popular iPods and other portable MP3 players, and no doubt explains the rise in hours spent listening to the radio and using wireless phones.
Still, not everyone enjoys how digital devices have changed our lives. "It's sensory overload. Everywhere we go, there is something beeping, something ringing," Ms. Young says. "It does make life seem a lot more hectic."
Write to Martin Peers at email@example.com.