Now that the 2012 U.S. presidential election season is over, we can finally turn our attention from the tea leaves of political statisticians and forecasters toward some 2012 numbers that are more meaningful to us in the video world. The results of two significant online video consumer studies were presented at the recent TelcoTV conference, and highlights from NBC Universal’s online video research from the 2012 London Olympics were also published.
At the last several TelcoTV conferences, Adi Kishore, Senior Analyst from United Business Media’s Heavy Reading research service, has presented its annual State of the Video Consumer survey to attendees.
This year’s Heavy Reading survey concluded that broadband consumers assign a tangible value to online video content and better online service quality. Twelve percent of consumers surveyed would pay up to $10/month for a premium online video tier, and an additional 26% would pay $5/month, according to the study. Some of these consumers would also pay a premium for higher quality-of-service and pay per-use for a “speed boost” button. More than 10% of OTT video consumers would switch broadband providers if the video quality were better with a competing provider.
Consumer research data was also presented by Jonathan Hurd, Director at Altman Villandrie & Company, a market research and consulting firm. Altman Villandrie and Research Now collaborate to conduct an annual study of online video viewing each summer for TVs, mobile handsets, tablets and computers. The study surveyed viewing habits, multiscreen viewing practices, cord-cutting, the importance of TV Everywhere (the access of pay TV programming online, upon authentication by the service provider), and willingness to pay, from about 3,400 consumers.
The survey found that growth of pay TV subscribers has not kept pace with the growth of TV households (the rest are cord-cutting, cord-shaving, or are “cord-nevers”). As of Q3 2012, more than 70% of pay and non-pay TV consumers age 18-34, and 37% of those aged 45-54, watch TV shows and movie content online at least once a week; up from about 60% and 33% in 2011, respectively.
Survey findings also report that more than 37% of consumers aged 18-34 spend less on pay TV because they use Internet video instead (which was up at least 10% from 2011). Of those who stop taking pay TV, 56% said that Internet video was good enough for their needs. Among viewers age 18-24, that number was 81%. Online video consumers also value time-shifting (online on-demand) and location-shifting (viewing anywhere on any device).
However ominous the foregoing may sound, the value of pay TV is not lost, even among cord-cutters. Twenty-two percent of Altman Villandrie’s cord-cutters overall said that they would re-subscribe to pay TV because they miss seeing shows as soon as they are available. Seventeen percent of them miss live sports, which is a pay TV mainstay. Current pay TV subscribers value live news, early-window and sports programming the most.
The Altman Villandrie survey also found that mobile devices such as tablets and smartphones are having a great impact on video viewing. Researchers noted that tablet viewing more than doubled across all age groups – with the highest growth among over-45s. Across all age groups, at least 80% of tablet owners used their tablets at least “sometimes” while watching TV, demonstrating the potential for alternative controls and tablet-augmented user experiences.
More proof for the popularity of multiscreen viewing comes from the video content provided by NBC Universal during the London Olympic Games. Telecompetitor published an article previewing what was to come, prior to that event. That article mentioned a joint effort between NBC Universal, Google, comScore and several other researchers, called the Billion Dollar Lab.
After the games, the actual numbers were very telling. According to a summary published by The New York Times at the end of September, more than 217 million people watched the Games in the United States. Between these apps and NBCU’s Web site, there were 2 billion page views. Advertisers must have been very pleased with survey results that said 76% of watchers “enjoyed watching commercials during the Olympics that were tied in some way to the Games,” and that advertisers registered better brand recall.
The New York Times article went on to say that NBCU officials not only found that online and multiscreen viewing did not cannibalize the prime time TV audience, but also that overall viewing demonstrably increased. A comScore study of 720 “Olympics enthusiasts” said that they spent 89% of their time watching TV. Social media also played an important role: a Bluefin Labs study for NBCU counted 83 million Olympics-related comments on social media sites; nearly 5 million per day.
So what are the key take-aways here? First, the demise of pay TV has been greatly over-exaggerated. The Altman Villandrie-Research Now survey found that only about 6% of consumers are actually cord-cutters or cord-nevers. Heavy Reading’s study showed that pay TV subscribers are far more likely to change to another pay TV service than they are to ditch pay TV altogether, and that more than 40% of pay TV subscribers stay with their pay service for five years or more.
Second, the potential for multiscreen services is clear, including for pay TV operators. According to Altman Villandrie, TV Everywhere appeals to pay TV consumers of all ages, although pay TV providers can do a better job of creating awareness for it. Fewer than 40% of consumers who subscribe to a pay TV service provider with TV Everywhere service are aware that their provider offers it. But among those who are aware, 45% of them use it at least weekly.
Unique programming also drives even the multiscreen viewer back to pay TV, as was demonstrated by NBC Universal’s multiscreen Olympics initiative. Their multiscreen users registered more than 5.5 overall viewing hours, compared with about three hours for TV alone.
One thing is for certain from these studies and many others: for many, Internet-delivered video and multiscreen TV have become part of the fabric of daily life.