Why Is Video on Demand Low on Demand in Israel?

Locals use VOD services far less than Americans, even though they have the technology. But, as one expert explains it, prime-time viewing is like gathering around a national 'tribal fire.’

If you were to rate it according to the number of subscribers to delayed-broadcast services it has, Israel would be a global leader. About half of all households have devices for recording and replaying broadcasts, and between cable broadcaster HOT and satellite broadcaster Yes, there are some 700,000 subscribers to video-on-demand services nationwide.

The technology for watching movies and television shows when you want rather than when they are aired has grown more sophisticated. It started with video and moved to DVD and from there to the personal, or digital, video recorder, which allowed you to record programs on a hard disk. Next it was VOD, which enables the user to see an entire season of a favorite television show when and how long you want.

But the fact is that Israelis don’t use this technology much at all. The Israel Audience Research Board, which decided in 2011 to measure delayed broadcast metrics, does not publish authoritative figures on the phenomenon, which it measures as viewing done any time from 20 seconds after a broadcast is over. But estimates obtained by the TheMarker show that such viewing in Israel is very low by global standards.

The data show that the daily average for people using delayed broadcast of any sort is 1.7% of all households. Most of this viewing is done in the late evening by a relatively young audience.

During weekday prime-time hours in 2012, when some 64% of all households are watching television, only 3% are using delayed-broadcast technology. By comparison, in the United States the rating company Nielsen estimates that about 12% of all broadcast television programming is seen via VOD or other technologies. Most people see the delayed broadcast within seven days after it was originally aired.

The Nielsen figures show that over the past few years there has been a significant rise in the number of hours the average couch potato devotes to delayed-broadcast programming. In North America, people watch an average of four hours and 24 minutes daily of television. In the third quarter of 2008, an average of 13 minutes of that total was delayed broadcast; four years later it was up to 22 minutes.

‘Israelis are different’

“Despite that fact that the household penetration rate [in Israel] for VOD and other delayed-broadcast technology is more than 50%, most prime-time views are watching shows as they are broadcast,” says Yifat Ben Hai-Segev, director of the Audience Research Board. “We behave differently than the rest of the world. The dominance of prime-time here is a unique phenomenon. The public wants to gather around the tribal fire.”

Despite the fact that the average Israeli wants to see his evening news and prime-time programming as it’s being aired, viewing habits change during the weekend. On Fridays and Saturdays, when people have much more leisure time, they use it to watch programs on demand or to see niche programming on cable and satellite channels, while watching far less broadcast television.
According to figures obtained by TheMarker, delayed-broadcast viewing rises on Fridays to 1.8% and on Saturdays 2.1% of all households watch programs they have recorded or make use of VOD services. Most of the viewing is done during the day.

The increase in VOD viewing is felt by the cable and satellite companies.
“There’s an increase of 20% on the number of VOD orders on weekends or for YesMax over Shabbat compared with Fridays,” says Yona Wiesenthal, senior vice president for content at Yes. “Naturally, people have more time on weekends so they don’t have to miss anything.”

At HOT, the increase in the use of delayed broadcast on weekends is even steeper, amounting to some 38%, and over the last two years the number of weekend viewers using Hot’s VOD service has grown 15%. Viewers go in for marathon sessions in front of the small screen, with more than 90% viewing three or more installments of a series in one sitting on a recent weekend.

“The increase on the weekends is more among older viewers. Children use VOD during the week,” says Yoram Mokady, vice president for content at HOT. “The time of the week when older people have leisure is the weekends. During the week they return home from work and prefer to stare at whatever’s on the TV right at that moment instead of investing time and searching for something they want.”

Another weekend trend that the data show is the increased popularity of niche channels. During the week the general interest channels ‏(1, 2, 10, 9 and 24‏) captured 55.2% of all viewers last year, but during the weekends their share fell to 48.2%. The drop can be seen in the ratings for channels 2 and 10 on Friday evenings and Saturdays. Sundays through Thursday, Channel 2 enjoyed average ratings in 2012 of 20.9% ‏(of all the population‏), but that figure fell to 16.9% on weekends. For Channel 10, the drop was even more dramatic − from 8.6% to 3.8%.

Delayed-broadcast presents a threat to broadcast television, which relies on advertising for revenue. One way they have fought back is to create live media events that will attract viewers in real time and encourage them to feel they are active participants.

The logic behind reality TV

“There’s no doubt that a large part of the crazy spending on reality programs was done just for this reason,” says a senior executive at one of the televison broadcasters, who asked not to be identified.

“The broadcaster has to create a major event around every program to make it worth the viewer’s time to watch it live. In the years to come the threat will only grow, forcing broadcasters to spend more and more money on big media event,” the executive explains.

For his part, Mokady says the so-called “linear television” is not yet dead. In the final analysis a person wants someone to package the programming and create a line-up. This world is far from disappearing. People want to be fed, even on movie channels and certainly on children’s’ channels.

The big change, he says, has come with TV series. “People aren’t willing to wait a week for another installment. We even see that with documentary series. People prefer to look at them marathon-style in a few installments.”

Another reason commercial broadcasters have to remain optimistic is that Israeli viewers seem to like their commercials.

In the past, viewing would fall precipitously while ads were being broadcast, but the Audience Research Board has found that in recent years more and more people are staying on their couches for commercials.

“The reason for this is simple − ads are part of the culture,” says Ben Hai-Segev. “The decline in ratings during commercials today, for instance during the most successful reality shows, is just a few percentage points.

Dreamstime
Emil Salman
David Bachar
Audience Research Board