Research |
Pay-TV will go on dominating US market
The video and TV market is changing , but not as fast as many people are suggesting , according to analyst firm Strategy Analytics . In its report , Subscription Video and TV Forecast – North America , Strategy Analytics predicts that :
• Overall annual spending on subscription video and TV services in the US will peak at $ 130.3 billion (€ 117bn ) in 2019
• Revenues will then decline to $ 125.7 billion by 2022
• Established pay-TV firms such as Comcast and AT & T , including their legacy ‘ managed ’ pay-TV services and new Internet-based services such as DirecTV Now , will still account for more than 80 % of total market revenues in 2022
• The share of emerging competitors such as Netflix and Amazon will remain below 20 % until beyond 2022
• Annual revenue growth for emerging players will fall to just 4.4 % by 2022 “ It ’ s not about subscribers , it ’ s about revenues ,” says Michael Goodman , director , TV and media strategies . “ Focusing on Netflix subscriber numbers , impressive as they are , ignores the fact that pay TV ARPUs are still more than 10 times higher .”
The report analysed the convergence of traditional pay-TV services offered by firms such as Comcast and AT & T with newer subscription video services from Netflix and Amazon Prime Video , as well as Internet-based pay-TV services such as DirecTV Now , Sling TV , YouTube TV , Hulu Live , and PlayStation Vue .
According to Strategy Analytics , consumer decision-making and behaviour are changing as a result of this evolving
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• What is the impact of bundling video with services such as home shopping , mobile or broadband on overall video subscription and usage levels ?
The report suggests that video providers will improve their chances of succeeding in this complex new environment if they focus on identifying consumer needs and desired experiences , evaluate their existing products and service offers , and monitor their market performance . “ There is a long way to go before the winners can be announced ,” says David Mercer , VP and principal analyst . “ The long-term transition to IP-delivered video will allow many players to benefit , but understanding consumer needs and how to meet them will be critical to any successful strategy ,” he advised .
Binge viewing is pervasive
According to new research , Binge Viewing – A Consumer Snapshot , from The Diffusion Group ( TDG ), the phenomenon – viewing more than one episode of a TV series back to back – is rapidly becoming universal , with nearly nine-in-ten Adult Broadband Users ( ABUs ) binging at least occasionally . But the frequency of binge viewing skews strongly in favour of younger adults , says TDG .
TDG ’ s new analysis identifies and profiles three groups of adult broadband users in terms of their binge viewing habits :
• Heavy Bingers ( binge daily , comprise 14 % of ABUs ),
• Medium Bingers ( binge monthly but not daily , comprise 51 % of ABUs ), and
• Light / Non-Bingers ( 21 % of ABUs that binge less than once a month , 14 % that do not binge at all ). Importantly , TDG analysts found that the frequency of binging is strongly
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correlated with the viewer ’ s age . For example , 58 % of Heavy Bingers are between the ages of 18 and 34 , while 56 % of Light / Non-Bingers are age 45 and older .
“ The fact that 31 per cent of Heavy Bingers are between the ages of 18 and 34 further illustrates just how different millennial viewing habits are from those of older generations ,” notes Michael Greeson , president and principal analyst at TDG . “ For more than a decade , TDG has predicted and observed a structural transformation in what it means to ‘ watch TV ,’ with viewing behaviour slowly changing from an activity defined by flipping between different live shows on different networks , to one characterised by on-demand binging of individual series .”
As these consumers age and younger generations steeped in ‘ quantum habits ’ follow behind them , Greeson argues that this behaviour will only become more prominent , further impacting programming and distribution strategies .
Bad app or site sees customer loyalty plummet
Internet users are growing more demanding and less forgiving , according to the results of a consumer survey from Apica , the performance monitoring and testing experts . In a clear call to action for organisations around the world , Apica ’ s survey found that three quarters of respondents expect websites and apps to perform faster than they did three years ago .
Apica conducted the survey among Internet users in the UK , US and Sweden , to investigate changing attitudes towards a brand ’ s digital performance . The
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marketplace . Accordingly , the firm |
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suggests that there are further questions |
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which both traditional pay-TV providers |
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and emerging online video players should |
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consider , including : |
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• To what extent do consumer segments |
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view these services as competing with |
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each other ? |
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• What are the sweet spots that will drive |
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maximum revenues or profitability ? |
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• Which factors drive different consumer |
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segments to choose between the |
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services available ? |
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• How much will consumer segments |
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be prepared to pay for different video |
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content packages ? |
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• How important is the availability of |
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individual content titles , such as TV |
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shows or movies , in affecting choice |
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decisions ? |