We’ve been waiting for the tipping point, where online really surges against broadcast media. It just arrived, says Duncan Greive, who has read NZ on Air’s epic new audience behaviour survey so you don’t have to.

The release of NZ on Air’s audience survey is on its way to becoming the most important event in media for the content creators, networks and absolute nerds (hi!) whose careers and interests hinge on the changing dynamic of audiences in the digital era. This is because it looks at trends in audience behaviour across multiple media, as opposed to snapshots within particular mediums over a night or a month. More importantly, it’s also untainted by the commercial interests of its funders, being commissioned by NZ on Air and carried out by Glasshouse Consulting – neither of which have a dog in this particular hunt.

Thanks to the frequency with which they’re carried out, there is a huge weight to the surveys – they capture two years’ worth of changes in behaviour, an incredibly long time in this lightning-paced arena. Additionally, this being the third in the series, we now have clear trend lines established, and they have some loud messages across age, device, brand and medium.

The launch was held at the Crowne Plaza in midtown Auckland, in a room full of mostly middle-aged people from across the various NZ on Air stakeholder groups. There’s an 80 page deck covering all the findings, which is required (and likely sobering) reading for anyone deep in the business. But here are my pick for the ten most telling data points.

1. Broadcast is still #1 – but likely for the last time

“Despite rapid changes, the biggest audiences remain on broadcast,” said researcher Jeremy Todd. “In two years, if current trends continue, that will have changed.”

This statement summed up the whole presentation. For over a decade we’ve been talking about online as a delivery mechanism, waiting for it to arrive as a habitual alternative to traditional media formats. This is the year we really see that biting in terms of the daily, routinised behaviour. Linear TV – the industry name for pre-scheduled shows on free-to-air or Sky TV – remains the most popular medium, but its audience is in well-established decline. In just four years it has moved from the daily diet of choice for four in five New Zealanders, to just two in three.

2. SVOD will overtake linear sooner rather than later

Meanwhile Subscription Video on Demand services like Netflix and Lightbox have rocketed from a niche of 6% in 2014 to 37% today, their growth mapping that of fibre broadband, which has grown in tandem to nearly half of those surveyed.

One stat which shows exactly how straight the switch from linear to SVOD has been: linear users average four hours consumption a day; SVOD users watch three hours a day.

3. The generational divide is stark (but narrowing)

Just 49% of 15-39 year olds watch linear TV on the average day, while 80% of those 45 and older do. This inverts for SVOD, which has a 52% daily usage for 15-39s and and 23% for 45+. This is the really big gap – that classic family mythic of dinner and the (linear) telly holds true for those born before the seventies, and is fading fast for those born after.

That said, older generations are still coming online – just more slowly. The drivers of increases in SVOD and smartphone usage, for example, are more older New Zealanders than younger ones (because the latter are mostly already there). Other factors which used to be helpful predictors of media consumption were ethnicity, gender, access to technology and whether you lived in Auckland. They’re much less useful now: broadly speaking a lot more people are now behaving the way white Auckland men did in 2014 (this sounds terrible I know; and it probably is).

4. OnDemand appears to have already peaked

OnDemand (free-to-air, ad-supported television or Sky’s catch-up service) has strikingly stagnated in daily usage, moving from 18% to 19%. Frighteningly for Sky and Three, usage of their platforms is flat or declining, with only TVNZ seeing a significant rise, from 10% to 13% in that timeframe. This is in part a result of a heavy investment by the state broadcaster – playing heavily hyped shows like Killing Eve online first, screening reality smash hits like Love Island and The Bachelor there the same day they air overseas and investing in a library of cool local exclusives.

5. TVNZ is playing a very smart game

This online emphasis can be seen as a kind of self-cannibalising of its younger demo channel, with TVNZ 2 declining to a 20% daily reach – if current trends continue, TVNZ OnDemand could well have overtaken it by 2020. By contrast, TVNZ 1 has actually increased its daily usage, a remarkable effort in this climate.

This part of a broader attempt to use revenue from its huge but ageing TVNZ 1 audience to stake out the internet (see also: its excellent youth venture Re: and kids’ portal HEIHEI). It’s the right thing to do, but also a coolly calculating commercial play: TVNZ surely doesn’t particularly mind that it appears to be having a serious impact on its major private sector competitor.

In part this shows the kind of adroit, far-sighted thinking you can do when you’re backed by the government. Yet it also suggests that Mediaworks CEO Michael Anderson’s comments regarding the shaky future of its TV assets were no bluff. As if to back them up, Three’s daily usage has declined from 31% to 25% in two years. The survey suggests that, far from sabre-rattling, the future of private sector TV is a real and present conundrum for this government.

6. Netflix is a juggernaut

Most of the lines above follow a reasonably gradual gradient. By far the steepest in either direction is Netflix. The company has a market cap of $233bn, not a long way off New Zealand’s annual GDP. It will spend around $12bn on content in 2018, while costing around half that of the most basic Sky package. In a little over three years it has vaulted both TVNZ 2 and Three in popularity. And it’s incredibly popular here, with 69% of those aged 15-34 having access to it.

One big difference between Netflix and linear: It’s ad-free, meaning that those who traditionally used television to reach their audience must learn a new trick.

Lightbox meanwhile has a huge penetration, at 19% of New Zealanders, but its daily usage is lower, at 5% – significantly up on 2% in 2016, but a ways off Netflix.

7. Netflix’s dominance is a problem for a number of different people

This survey’s commissioners at NZ on Air cannot currently directly fund content for what is already the single most popular longform platform for young New Zealanders. More ominously, New Zealand is a tiny market for Netflix, which is headquartered 10,000 kilometres away in California – so our ability to influence it as consumers or government is close to nil.

The latter characteristics are shared with two other bigger video portals: YouTube and Facebook. Each are still growing, albeit at slower rates, but their stats are coloured by, respectively, a significant usage as a music player and a preponderance of short viral videos which are somewhat peripheral to the core purpose.

Netflix, YouTube and Facebook are characterised by a quest for sector domination which makes local video creators effectively powerless as priorities swing around in response to consumer behaviour, public pressure and investor priorities.

It’s a freaky scene and it’s only going to get worse.

8. The Sky is falling

Sky’s recent troubles are both well-documented and perhaps overstated: it does have declining revenue and subscriber numbers, and has lost some marquee sports to Spark. And yet it remains massively profitable and popular, particularly with older (read: richer) New Zealanders.

What this survey shows is a major decline in daily usage, one which significantly outpaces its loss of subscribers (in all likelihood because its base has aged and their children have left home).

The worst affected has been Sky Movies, perhaps the most direct competitor with Netflix, which has gone from a 7% daily usage to just 2% in four years. With a new CEO and a major suite of new online products launching next year, this is one stat which may yet be able to buck the broad trends.

9. The news is in trouble

As someone who works in and avidly consumes the news, this one gives me the shits. Daily online video viewing on Facebook or YouTube has overtaken newspapers (including news sites) for all New Zealanders. The headline drop in newspaper consumption from 49% to 41% actually masks the true scale of the problem: daily readership is just 26% for 15-39 year olds. Magazines like ours fare slightly better – they are treading water around the 20% mark (though it’s just 9% for younger people). RNZ has had the best sustained run in media these past few years, and it remains the most popular station in the country – but a decline to 9% daily usage (amid a broadly static radio market) shows the importance of the extra online resources it has recently been granted.

One big bright spot for news is the Herald’s video: nearly doubling from 6% to 11% in just two years, trailing the monster that is Stuff by just 2%.

That can’t disguise the scale of the challenge to the news media, though – we need to figure out how to reach and sustain the attention of far more people under 40 than we currently do.

10 This really matters

While I said at the top this was only of interest to content creators, networks and nerds, that shouldn’t be the case. NZ on Air commissions this research to find out where its audiences are, what they’re doing and who is not seeing NZ on Air-funded content.

This, then is a licence to redirect funds. While some major changes have come through in recent years – most notably the platform-agnostic move of 2016 – the motion has been somewhat timid. This work, particularly what it reveals about the habits of young New Zealanders (and under 40s are roughly half the population), gives a clear mandate to chase audiences into the stratified, niche-strewn online murk.

Yet as much as it is a guiding light for NZ on Air, it should also echo throughout many other sectors. Advertising, communications and production in the public and private sectors can all create new baselines from this research. It shows a vast new complexity to all those sectors, and no one’s job is any easier off the back of it.

The work has to be done though. Already we see signs of its absence affecting our democracy, in plunging youth voter turnouts, diminished census returns and lower trust in and consumption of news media. For a decade we’ve largely been content to take small steps, wary of over-committing and running ahead of behaviour. What we see now, clear and unmistakable, is that the time for caution is over: the great online migration is in full flow.

Declaration of interests: Lightbox is a partner of The Spinoff’s television coverage, and has commissioned an original show coming later in 2018. Mediaworks syndicates content from The Spinoff, and airs The Spinoff TV on Fridays at 10.45pm