Thanks for posting this study Bert. I agree there are some good insights, and
it appears that this study has fairly good correlation with the Deloitte study.
As always some stats are of more interest than others depending on what you are
looking for. Bert actually highlighted a few that conflict with his world view,
especially the importance of watching linear TV.
He did not highlight a major finding of the study.
In 2011, people estimated that they spent 2.9 hours per week watching streamed
TV series, programs and movies. Now it is 6 hours per week - the viewing has
more than doubled (Figure 1).
Clearly, this is evidence that consumers are moving to VOD for pre-produced
programming - the reasons can be found throughout the report.
But Figure 2: Average number of self-reported weekly hours of active TV/video
viewing by gender, puts the 6 hour figure into context.
Add up all the numbers, and they are nowhere near the five hours a day that the
ratings services say we watch TV. As these numbers are self reported, it may
be that people only report the stuff they actually pay attention to, not the
number of hours the TV is turned on.
But this provides another data point on the overall percentage of programming
that is watched via OTT services - in this case on the order of 20-25%.
The most important takeaway:
"However, 22 percent of these consumers are already paying for TV and video
in the form of OTT services. This indicates a willingness to pay for
subscription TV, albeit with a different approach. In order to meet these
consumers' needs, a pay TV service with a clear value needs to be provided.
On Sep 3, 2015, at 9:59 PM, Manfredi, Albert E <albert.e.manfredi@xxxxxxxxxx>
wrote:
http://www.ericsson.com/res/docs/2015/consumerlab/ericsson-consumerlab-tv-media-2015.pdf
A real treasure trove. A quasi-global view of where TV stands in September
2015:
"More than 20,000 online interviews were held with people aged 16-59, and
over 2,500 with consumers aged 60-69, across 20 markets: Brazil, Canada,
China, Colombia, France,
Germany, Greece, Ireland, Italy, Mexico, Portugal, Russia, Spain, South
Korea, Sweden, Taiwan, Turkey, UK, Ukraine and the US. All respondents have a
broadband internet connection at home, and watch TV/video at least once a
week. Almost all use the internet on a daily basis. This sample is
representative of over 680 million people."
Many of the stats are not quite as dramatic as in the US, since they are
aggregated, but still show the obvious trends. This migration is happening
all over.
Here's an interesting quote:
"Linear TV remains key for many households. The perceived value of scheduled
linear TV remains high, mainly because of its premium content, ease of
viewing and social aspects. Linear TV often acts as the 'household campfire'
in a social respect, as well as enabling the viewing of live content, such as
live sports."
Right there is part of the problem with linear. Aside from the live sports
aspect, the other reasons for preferring linear:
1. Ease of viewing
2. Premium content
3. Household campfire
don't really differentiate linear anymore, at least not in the US. On demand
can easily match linear, in these aspects, and certainly in the US it has
done so.
On p. 10:
"Half of consumers that watch linear TV say they can't find anything to watch
on a daily basis. Among consumers aged 25-34, it is an even greater
challenge, with as many as 62 percent saying they face this."
On p. 11:
"Searching for serendipity. Traditional linear TV has a distinct element of
serendipity: discovery through happy coincidence when flicking between
channels. In traditional linear TV, it is common for people to accidently
find programs they didn't know about, but are interested by. ... Serendipity
is however possible for on-demand services. It can be created, for example,
by the interplay between multiple services. This interplay is evident in the
current practice of linked viewing, where friends and family send links to
interesting content through social media, YouTube recommendations that engage
the viewer, and the promotion of new title releases."
In other words, even these "social aspects," often mentioned as being the
province of linear, can be had with on demand. Simply a matter of updating
one's habits.
Aside from aggregated stats that don't yet quite match our own, I thought
that perhaps the most important parts of this report are on pp. 12-13. This
is where they talk about consumer satisfaction, and what consumers think
needs the most help. They have nice graphics, and here are the explanations:
"Traditional linear TV vs. on-demand services. As can be seen in the US data
portrayed in Figure 15, there is a significant difference in the Net Promoter
Score (NPS) between traditional linear TV services, and on-demand services.
The former scores only 10 points, whereas the latter scores 36. The
difference is even higher, with a 72 point difference between the highest
scoring on-demand service and the lowest scoring traditional linear TV
service in the US. Interestingly, low scoring linear TV service providers
rate significantly better on their on-demand services than on their
traditional services."
That last sentence is interesting. Then an even more interesting graphic:
"Figure 14 highlights what service providers do well (reinforce), and where
consumers feel they can improve (fix). For traditional linear TV services,
only video quality ends up under the 'reinforce' segment, and both price and
availability of content need to be addressed. Meanwhile, for on-demand
services, price and available content are strong points, with no weak points
in any areas. The NPS results are therefore unsurprising."
Here's one amusing quote on P.13
"Converting cord-nevers to pay TV. Cord-nevers - consumers who have never
paid for managed TV services - already know how to find content. **These
consumers struggle to understand the value behind traditional linear TV,
especially with inflexible packages, long contracts, lots of advertising, and
high costs.** Half of these consumers believe they will never pay for a
managed TV service, even in the future.
"However, 22 percent of these consumers are already paying for TV and video
in the form of OTT services. This indicates a willingness to pay for
subscription TV, albeit with a different approach. In order to meet these
consumers' needs, a pay TV service with a clear value needs to be provided.
"Those classed as cord-nevers watch less TV and video content in general.
They spend less time viewing broadcast TV and downloaded content, and stream
less VOD (Figure 16). The majority of the time these consumers spend watching
TV and video content is taken up by movies, series and other programs on
scheduled broadcast TV. For these consumers, the focus is not on getting more
content to consume, but rather having the means of accessing quality content
when they have time to spend watching TV and video."
Good insight!
Bert
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