Weekly Update

Must-see TV still must-see

For all the talk of cord-cutting and on-demand, a la carte video, TV viewers remain creatures of habit, a new study by Ericsson (pdf) makes clear.

A survey of consumers in nine countries (U.S., U.K., Germany, Sweden, Spain, China, Taiwan, Brazil and South Korea) found that 83 percent still watch regular old linear TV, at the appointed time, on a more-than weekly basis, making it by far the most frequent viewing activity in the study. It was actually up a tick in 2013 compared to 2012, when it had dipped to 79 percent.

On-demand streaming was the second most popular activity, with 63 percent indulging on a more-than weekly basis, followed by self-recorded time-shifted programming (i.e. DVR) at 31 percent, and downloaded movies or TV content at 29 percent.

That’s not to say new viewing habits aren’t being formed, however. Among the study’s key findings:

  • 72 percent use mobile device at least once a week for video viewing, including 42 percent who use them outside the home
  • Even late adopters are jumping on the streaming bandwagon. As many as 41 percent of 65-69 year olds stream on-demand or time-shifted content on a more-than weekly basis.
  • Linear TV viewing is becoming more concentrated on live sports, big events and social viewing while scripted content is increasingly viewed on demand.
  • 75 percent of viewers multi-task by using a mobile device while watching TV, including 25 percent who watch more than one program at a time.
  • Cord-cutting/shaving is accelerating. The number of people who report reducing or eliminating the cost of “managed subscriptions” (cable, satellite, telco) increased from 14 percent in 2012 to 23 percent in 2013.

The study’s most compelling finding, though, isn’t a single data point but what the overall mix of old habits and new says about what consumers are looking for from the various service providers from which they source TV and other video content. According to the report:

When it comes to paying for content, consumer logic has changed. In the past, TV packages would provide a wealth of channels that were charged at a premium and included services which the customer did not use. Today, new S-VOD offerings are perceived as being affordable and consumers are happy to add these services to their mix…

The wide range of on-demand services means that in advanced markets many different payment models are often used simultaneously by individual consumers. This leads to the desire for ‘one-bill solutions’ that can cover all of these potential payment approaches, but still offer a personalized model.

The emergence of new technologies is the key driving force behind the development of new business models. However, the consumer need for an aggregated experience will be the factor that shapes the media landscape of tomorrow.

Ericcson’s findings, in fact, give empirical support to the points actor Kevin Spacey made in his widely quoted comments at the Edinburgh International Television festival last week.

“Clearly the success of the Netflix model — releasing the entire season of House of Cardsat once has proved on thing — the audience wants the control. They want freedom,” Spacey said. “If they want to binge — as they’ve been doing on House of Cards and many other shows — then we should let them binge.”

To the new generation of viewers, “there’s no difference between watching Avatar on an iPad or watching YouTube on a TV and watching Game of Thrones on their computer. It’s all content. It’s all just story,” he said. “The device and length are irrelevant.”

Unfortunately, the aggregated experience consumers are looking for, offering a mix of viewing options and use-cases from a single provider, is very much at odds with how the TV networks and studios would prefer to license their content. They would much prefer to license each use case — linear, on-demand, ad-supported, pay-per-view, mobile — separately, preferably to separate distributors, because more buyers keeps prices high.

One of the main sticking points in the ongoing dispute between CBS and Time Warner Cable, for instance, is digital rights. TWC would like to be able to bundle on-demand streaming rights with its linear TV service, while CBS wants to remain free to license those rights separately.

Reconciling what viewers want and what rights owners want will not be easy or painless. But the alternative is leaving it to consumers to figure it out for themselves. And rights owners will like that even less.