In the past five years, the viewing of video on multiple devices has become so widespread that it’s part of the norm in the TV landscape.
“People are consuming more video and the alternative ways to access video are mainstreaming,” Alan Wurtzel, president of research and media development for NBCUniversal, said. “Streaming to phones, tablets and computers is no longer just done by 25-year-olds who wear black and live in SoHo. It is very mainstream.”
Unsuprisingly, that fact is changing the defi nition of TV and the way multichannel providers and programmers think about their packages and offerings.
“We are working to make the experience of accessing video as seamless as possible across devices,” Comcast senior vice president and general manager of video servicves Matthew Strauss said. “We don’t just think about TVs. We think about video, because at its core television is just video and any piece of glass that can deliver video in a secure way is a TV. So it becomes all about how you personalize those experiences.”
As multiplatform video goes mainstream, companies must pay even closer attention to how patterns of consumption are shifting between different devices, Wurtzel and other researchers said. Some devices such as smartphones and tablets, are gaining traction with consumers and other platforms, like the PC, are starting to lose favor, they said.
STILL TUNED TO TV
In that changing landscape, total viewing of live and time-shifted TV programming grew by 15 hours and 38 minutes, from 149 hours and 1 minute a month in the third quarter of 2008 to 164 hours and 39 minutes a month in the third quarter of 2013, according to Nielsen.
“TV viewing as Nielsen measures it is in good shape,” Turner Broadcasting System chief research officer Jack Wakshlag said, noting that multichannel TV continues to capture market share. Viewing of ad-supported cable hit a record 17.2 hours per week last year.
“Cable networks account for two of every three hours of viewing,” Wakshlag said.
Over the last year, however, TV viewing has been generally flat, with some declines in younger demos. “We haven’t seen a lot of change in the Nielsen data, mainly because a lot of the consumption that we know is happening is occurring on platforms like smartphones and tablets that aren’t being measured,” ESPN senior vice president of research and analytics Artie Bulgrin said, echoing complaints by many of the 14 executives interviewed for this special report.
This is particularly a problem within younger demos. A 2013 Horowitz Associates survey, for instance, showed that about a quarter of all 18-to-34-year-olds watched TV on a tablet at least once a week, and that 43% of the demo watched TV content on a handheld device, Howard Horowitz, the research firm’s president, said.
Notable shifts are also taking place within the digital platforms. Nielsen data show that viewing video on TVs and mobile phones has risen while consumption of video on computers, DVD and Blu-ray players fell. “We are seeing a shift from PC-based used of video to mobile devices,” Wakshlag said. “What you are seeing is a shift between devices that doesn’t cannibalize TV.”
Time-shifted viewing on DVRs, VOD and increasingly via such over-the-top providers as Netflix is also growing. “Netflix doesn’t release data and is a real blind spot,” Bulgrin said, but outside surveys suggest significant usage. Horowitz Associates, for example, reported that about half (51%) of those aged 18-34 purchase a streaming subscription service such as Netflix.
DVR PLAYBACK IS NO. 1 NET
Important shifts are also occurring in the way consumers watch on traditional TV sets, as time-shifting shows dramatic increases, FX Networks executive vice president of research Julie Piepenkotter said.
“We are seeing a lift of 70% to 90% in the number of viewers between those who watched it live and the total viewing over [the] C7 window,” she said. “In broadcast for a number of years the No. 1 network is DVR playback, with a 4.8 rating.”
Within time-shifted viewing, a number of researchers argue that the traditional VOD multichannel platform is growing faster than DVR, thanks to the fact the programmers are putting more content on VOD, where operators typically don’t allow consumers to fast forward through ads.
“The number of DVRs in homes is leveling off and the level of viewing within TV homes that is timeshifted is about 17%, which hasn’t changed for years,” Wakshlag said.
At press time, it looked as if 2013 would mark the first time since the dawn of cable in 1948 that the multichannel industry as a whole lost subscribers. But losses are likely to be slight at just 0.1%, Leichtman Research Group president Bruce Leichtman said. Overall subscriber counts will remain flat until the housing market recovers, in Leichtman’s view.
Estimates of the impact of cord-cutting vary, but most show fewer losses than many analysts expected. Vincent Letang, executive vice president and director of global forecasting at MagnaGlobal, predicted that the number of multichannel homes would fall by 1 million between the end of 2013 and 2017. But his predictions weren’t all doom and gloom.
“We have reduced for the first time our estimates of cord-cutting homes and we think the situation has stabilized,” Letang said.
By contrast, PricewaterhouseCoopers has predicted that a slight loss of about 1.1 million cable homes between 2012 and 2017, to 55.9 million in 2017, will be more than compensated by the growth in satellite subscribers (growing from 34.6 million to 37.3 million in 2017) and IPTV households (from 10.1 million to 14.3 million in 2017), PwC principal Chris Lederer said.
Even so, most analysts predict that pay TV penetration will fall.
“It is a mature market,” SNL Kagan senior analyst Ian Olgeirson said, adding that slow growth is one of the key drivers for possible mergers in 2104. “There is tremendous interest around further consolidation as organic growth prospects dry up a little bit and operators looked to expand their efficiencies,” he said.
And that is just one example of how changing video consumption will continue to transform the business in 2014.
Don’t let the falling cable subscriber counts fool you: More consumers are watching TV than ever before.
Video Trends to Watch
• Viewing of TV in general and ad-supported cable in particular is at record levels.
• Time-shifted programming is also at record levels, but VOD usage is growing faster than DVRs.
• Significant viewing of TV programs on tablets and smartphones is not currently measured by Nielsen.
• Multichannel homes declined for the first time in industry history in 2013, but cord-cutting remains small, causing some to reduce their estimates of its impact.
SOURCE:Multichannel News research
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