Date post: | 25-Jan-2017 |
Category: |
Data & Analytics |
Upload: | ssrs-market-research |
View: | 61 times |
Download: | 0 times |
I N T E R N AT I O N A L T E L E C O M M U N I C AT I O N S S O C I E T Y 2 1 S T B I E N N I A L C O N F E R E N C E
T A I P E I , T A I W A N | J U N E 2 6 - 2 9 , 2 0 1 6
Aniruddha Banerjee, Ph.D. SVP- Advanced AnalyticsSSRS | Media, Pennsylvania, [email protected]
Transformation of Video & Television
Through Broadband & Changing
Consumer Preferences
@ssrs_solutions | 484-840-4300 | [email protected]
The Video Landscape
Drivers of Change
• Rise of multi-functional (smart and mobile)
devices that often come with viewing screens
• High-bandwidth Internet access (broadband)
that enables streaming (free or paid)
• Changing demographics and more tech-savvy
consumers of new smart devices
Face of this Change
• TV viewing is now more individual-centric and
less household-centric
• TV viewing can now occur at the time and location
of the viewer’s choosing
• TV is less of the “vast wasteland”; viewers can
choose exactly what they wish to watch and from
which source
The Video Landscape: Change Has Come in a Hurry
The “orderly” video landscape of yesteryear was dominated by the pay-TV model (cable, satellite, fiber)
which sold packaged services and bundles of channels, regardless of how many got viewed or how often
But, it is now history …
This monumental disruption of the video landscape needs a re-think and a new way to measure a landscape
that features multiple technologies, players, and consumer types.
© ssrs | all rights reserved
Consumer Segments Based on Video Preferences
Cord Loyalists
• Use pay-TV (cable, fiber, or satellite networks) only
Cord Couplers
• Use both pay-TV and online (Internet) access to content (often called “over-the top” or OTT)
Cord Cutters
• Once used pay-TV but now rely exclusively on OTT or free broadcast access (also called “over-the-air” or OTA)
Cord Nevers
• Never had pay-TV, rely exclusively on OTT and/or OTA
No Video Service
• Residual segment that views no TV at all
© ssrs | all rights reserved
SSRS’ Total Video Landscape (TVL) is a unique and comprehensive approach to measuring the total video
market from the video consumer, rather than the service provider, standpoint.
TVL identifies and measures five mutually exclusive video consumer segments, based solely on their choices
regarding how they gain access to video content.
© ssrs | all rights reserved
Two Key Developments
Then
“Live” TV evolved into “Time-shifted” TV thanks to the Digital Video Recorder (DVR) and Video on Demand (VOD)
Now
Paid OTT services offered by Subscription (Streaming) Video on Demand (SVOD) providers (Netflix, Hulu, Amazon, etc.) have taken Time-shifted TV to a new level and place
Then
Video and broadband were treated as complementary services that enabled pay-TV providers to offer them together in bundles
Now
They are legitimate substitutes, as broadband enables OTT or streaming of video content as alternative to conventional pay-TV video
© ssrs | all rights reserved
Consumer Segments in Q4 2014 & Q4 2015
0
10
20
30
40
50
60
No TV atall
CordLoyalists
CordCouplers
CordCutters
CordNevers
Percent of US Households in Consumer Segments, Q4 2014 and Q4 2015
Q4 2014 Q4 2015
0
20
40
60
80
100
No Pay TV Pay TV
Percent of US Households in Pay-TV/No Pay-TV, Q4 2014 and Q4 2015
Q4 2014 Q4 2015
• Cord Couplers account for nearly half of US households in both Q4 2014 and Q4 2015
• Cord Loyalists are about a third of US households (slightly under a third in Q4 2015)
• Cord Cutters and Cord Nevers are segments of roughly equal size, with some growth between Q4 2014
and Q4 2015
• Together, Cord Cutters and Cord Nevers represent the 16% of households in Q4 2015 who use no pay-
TV at all (among those with video service in some form)
• Cord Couplers, together with Cord Cutters and Cord Nevers, represent the 65% of US households in Q4
2015 who use OTT and OTA
• Cord Loyalists and Cord Couplers together represent the 79% of US households in Q4 2015 who use
pay-TV
72 64 63 57
11 11 13 133 6 5 1011 17 17 18
3 2 1 2
Cord Loyalists Cord Couplers Cord Cutters Cord Nevers
Percent of Households in Consumer Segments, by Race/Ethnicity, Q4 2015
White
African-American
Asian-American
Hispanic
Other Races
8770 71 80
1330 29 20
Cord Loyalists Cord Couplers Cord Cutters Cord Nevers
Percent of Households in Consumer Segments, by Presence of Children, Q4 2015
No Children Under 18
Children 0-17
Consumer Segments in Q4 2015, By Race/Ethnicity & Presence of Children
• White households account for over 70% of Cord Loyalists
• In contrast, Hispanics and Asian-Americans are over-represented (relative to their population proportions)
among Cord Couplers, Cord Cutters, and Cord Nevers, reflecting their relatively stronger preference for
OTT
• Cord Loyalists (who tend to be older) and Cord Nevers (who tend to be the youngest among all
segments) have 80% or higher of households with no children under 18
• Conversely, households with children under 18 are over-represented (relative to their population
proportions) among Cord Couplers and Cord Cutters
© ssrs | all rights reserved
14.3Q4 2015
Percent of US Households Downgrading Pay-TV Service in Past Six Months, Q4
2015
10.5
12.5
Q4 2015
Q4 2014
Percent of US Households Likely to Downgrade Pay-TV Service in Next Three
Months, Q4 2014 and Q4 2015
• About one in seven US households claimed in Q4 2015 to
have downgraded their pay-TV service over the past six
months
• About one in 10 US households anticipated in Q4 2015
downgrading their pay-TV service over the next three months
• Pay-TV service downgrade includes subscribing to fewer
channels, cancelling/reducing premium channels (HBO,
Showtime, etc.), dropping HD service, dropping VOD, etc.
• About one in seven US households anticipated in Q4 2015
reducing or cancelling their premium channels over the next
three months --- premium channels are now frequently
available via streaming from SVODs
14.1
19.7
Q4 2015
Q4 2014
Percent of US Households Likely to Cut/Drop Premium Pay-TV Channels in Next Three Months, Q4 2014 and Q4
2015
Cord Shaving (Service Downgrading) Has Become a Major Threat
© ssrs | all rights reserved
1.1
0.9
4.5
4.4
6.1
6.7
Q4 2015
Q4 2014
Percent of US Households Likely to Cancel Pay-TV in Next Three Months with Primary Reasons, Q4 2014 and Q4 2015
Likely to cancel Pay-TV Pay-TV is too expensive Watch TV over Internet instead
• Over 6% of US households anticipated in Q4 2015 cancelling their pay-TV service altogether over the
next three months
• The leading reason given was that pay-TV service had become “too expensive” which, in the era of free
or low-cost subscription-based streaming, suggests that there may be an inclination to seek out cheaper
OTT/SVOD alternatives
• About 1% of US households explicitly indicated a switch from pay-TV to streaming of video content
Cord-Cutting Threat is Not Far Behind Cord Shaving
© ssrs | all rights reserved
Building the Ideal SVOD
Building the Ideal SVOD: Content & Features
Desired SVOD Content Tested
TV shows - episodes
TV shows – full seasons
Very recent TV episodes
Full series: all episodes, all seasons
Pre-telecast TV episodes
Simple games
Low complexity games
High complexity games
Movies
Movies played in last 2 months
Movies played in last 4 months
Movies played in last 6 months
Movies played in last 12 months
Movies played in last 18 months
Movies played in last 24 months
SVOD Features on Offer
New content added every two weeks
New content added every month
New content added every 3-4 months
E-mail alerts about new content
Educational programs for children
Content in languages besides English
Gaming/games
Social media connectivity through service
Share favorites list with family/friends
Tag content for viewing later
Construction:
• Importance of desired content measured on a 5-point scale
(1=Not at all important to 5=Extremely important)
• Willingness-to-pay for offered feature measured as a binary
(1=Willing to pay more, 0=Not willing to pay more)
• Ordered Logit Regressions of desired content on all offered
features conducted
Desirability of SVOD content measured by willingness to pay more for various features
© ssrs | all rights reserved
Are Households Willing to Pay More for Recent Material?
(0.4) (0.2) 0.0 0.2 0.4 0.6 0.8 1.0
Movies played in last 2 months
Movies played in last 12 months
Movies played in last 2 years
Very recent TV episodes
Full series: all episodes, all seasons
Pre-telecast TV episodes
Simple games
Low complexity games
High complexity games
TV shows - episodes
TV shows - full seasons
Movies
Willingness-to-Pay Contribution of Recency (New Content Every 2 Weeks) to Various
Types of SVOD Content
SVOD Homes Non-SVOD Homes Broadband Homes
© ssrs | all rights reserved
• Recency matters!
Households are likely to
most favor (i.e., be willing to
pay more for) SVODs that
offer very recent material (no
more than two weeks old),
whether for movies or full
seasons/series of TV shows
• While demand for SVOD-
provided games/gaming
content is strong, there is no
comparable desire to spend
more on very recent material
• Households that do not
presently subscribe to
SVODs are even more likely
to favor recent material than
households that presently
subscribe to SVODs
Test alternative
hypotheses and
counterfactuals
Conduct model
validation:
goodness-of-fit,
replicability,
robustness
• Subscribing to leading SVODs like Netflix and Hulu enhances the importance and desirability of specific
content like movies and TV shows
• Netflix subscribers attach higher importance to movies, while Hulu subscribers do so to TV shows
• SVOD subscribers that desire both movies and TV shows often subscribe to both Netflix and Hulu (use
of multiple SVODs contrasts with the usual choice of single pay-TV provider)
Does Simply Subscribing to SVODs Increase Desirability of SVOD Content?
© ssrs | all rights reserved
0.0 0.1 0.2 0.3 0.4 0.5 0.6
Movies played in last 2 months
Movies played in last 12 months
Movies played in last 2 years
Very recent TV episodes
Full series: all episodes, all seasons
Pre-telecast TV episodes
TV shows - episodes
TV shows - full seasons
Movies
Contribution of Subscription to Leading SVODsto Various Types of SVOD Content, SVOD Homes Only
Hulu
Netflix
Test alternative
hypotheses and
counterfactuals
Are Households Willing to Pay More for Certain SVOD Features?
© ssrs | all rights reserved
• Strong willingness to pay more for features like educational content designed for children and games/
gaming content
• Households without experience of SVOD content are inclined to pay even more for SVOD features than
households actually subscribing to SVODs
6
11
10
11
18
22
32
21
24
26
26
31
41
48
Programming in other languages
Direct connection to social media sites
Sharing favorites list with family/friends
Email alerts about new programs
Tag a show as "Wait and Watch"
Games/gaming
Educational programming for kids
Percent Willing to Pay More for Some SVOD Features, By SVOD and Non-SVOD Homes
Non-SVOD Homes SVOD Homes
14
25
29
26
43
53
New content every 3-4 months
New content every month
New content every 2 weeks
Percent Willing to Pay More for Some SVOD Features, By SVOD and Non-SVOD Homes
Non-SVOD Homes SVOD Homes
Are Households Willing to Pay More for Certain SVOD Features?
© ssrs | all rights reserved
• Strong willingness to pay more for the most recent new content
• Households without experience of SVOD content are inclined to pay even more for SVOD features than
households actually subscribing to SVODs
© ssrs | all rights reserved
Do Non-SVOD Households Attach More Importance to SVOD Features?
• Non-SVOD households uniformly attach greater importance than SVOD subscribers to various types of
SVOD content
• This indicates general readiness or willingness of non-SVOD households to supplement, or substitute
for, pay-TV service with SVOD content
25
51
49
12
13
13
54
52
58
48
68
78
28
30
33
74
78
80
Episodes shown pre-TV…
Recent TV episodes
Full series (all…
Simple games
Low complexity games
High complexity games
TV Shows - episodes
TV Shows - full seasons
Movies
Percent Responding Highly Important to Have Specific Types of SVOD Content,
By SVOD and Non-SVOD Homes
Non-SVOD Homes SVOD Homes
33
35
38
42
43
45
58
61
65
65
66
66
Movies shown in theaters,past 24 months
Movies shown in theaters,past 18 months
Movies shown in theaters,past 12 months
Movies shown in theaters,past 6 months
Movies shown in theaters,past 4 months
Movies shown in theaters,past 2 months
Percent Responding Highly Important to Have Specific Types of SVOD Content,
By SVOD and Non-SVOD Homes
Non-SVOD Homes SVOD Homes
Building the Ideal SVOD: Findings & Implications
1Recency matters: availability of new content every two weeks or every month increases the
desirability of most types of SVOD content tested (exception is gaming-related content)
2Gaming is the second-most important factor associated with higher desirability of most types of
content
3 Desirability of games rises as complexity goes from simple to high
4 Ability to tag content to watch at a later time drives up the desirability of TV shows and movies
5For Parents with SVOD, the ability to “share favorites” increases the desirability of gaming-related
content
6For Parents with SVOD, the ability to connect to social media directly increases the desirability of
gaming-related content
7Program alerts via e-mail, children’s educational programming, or programming in other
languages do not appear to significantly influence the desirability of various types of SVOD
content
© ssrs | all rights reserved
Demand for “Kids & Family”
SVOD
© ssrs | all rights reserved
Value and Content are Main Drivers of SVOD Demand
• SVOD is seen as viable alternative to pay-TV if it is
− Affordable and good value
− Source of desired content (without excessive choice)
• A “Kids and Family” SVOD has broad-based appeal for both SVOD subscribers and non-subscribers among parents
− SVOD non-subscribing parents (green bars) care most about value and children’s well-being as viewers
− SVOD subscribing parents (pink bars) care most about content (type, quality, variety, ease of access)
8.6
7.4
7.4
6.9
6.6
5.8
5.3
5.0
4.8
3.8
Used and liked friend's account
Children wanted me to subscribe
New type of service
Content for mobile devices
Complements current streaming
Unique new features
All content in one place
Easy to find content
Best price among services
Good value for the money
Top Reasons for Subscribing to Any SVOD (Mean Weighted Rank)
4.0
4.3
4.3
4.3
4.3
4.4
4.5
4.5
Complements current streaming
Lots of content
Content kids prefer
Easy to find content
Good variety of content
High quality content
Kid-friendly and safe content
Good value for money
Top Reasons for Subscribing to “Kids and Family” SVOD (Mean
Weighted Score)
38
36
26
Broadband Homes
28
43
29
Parents w/o SVOD
© ssrs | all rights reserved
Likelihood of Subscribing to a “Kids and Family” SVOD
11
3158
Non-Parents w/o SVOD
Leaning Yes
On the Fence
Leaning No
17
34
50
Non-Parents w/ SVOD
48
35
18
Parents w/ SVOD
• More than one-third of broadband homes
are likely to subscribe to an SVOD with
“Kids and Family” content
• Parents with SVOD service already are
most likely to subscribe, while non-
parents without SVOD are least likely
© ssrs | all rights reserved
Likelihood of Cord Shaving/Cutting Among Likely Subscribers to a “Kids and Family” SVOD
No Change
Cord Shaving
Cord Cutting
• Almost half of broadband homes are
likely to cut/shave pay-TV in order to
subscribe to “Kids and Family” SVOD
• Parents without SVOD service are most
likely to cut/shave pay-TV in order to
subscribe to “Kids and Family” SVOD
48
42
10
Broadband Home
39
42
19
Non-Parents w/o SVOD
43
57
Non-Parents w/SVOD
32
56
12
Parents w/o SVOD
5238
10
Parents w/SVOD
Conclusions
Video Landscape Transformation: From Pay-TV to SVOD
1Broadband and smart/mobile devices, and changing demographics, have permanently disrupted
the video landscape which persisted for several decades
2In the new video landscape, TV viewing is increasingly personal (what, how, when, and where to
view)
3While pay-TV is not in danger of disappearing, it is suffering from a “thousand cuts” (openly from
cord cutting and more subtly from cord shaving)
4OTT (and SVOD, in particular) enables more targeted viewing of content and supports a more
interactive experience than pay-TV (games, social media, user-generated content)
5Pay-TV providers are taking defensive action by co-opting video streaming (TV Everywhere
programs in US) or launching their own niche SVODs
6The move to “skinny bundles” by pay-TV providers may be appropriate response to viewers
unhappy with traditional pay-TV bundles, but it is disrupting their business models
7The evolving video landscape will be governed by (1) easy connectivity, (2) mobility, (3)
personalization, (4) choice, and (5) lower costs to view
© ssrs | all rights reserved
@ssrs_solutions | 484-840-4300 | [email protected]
Aniruddha Banerjee, Ph.D. SVP- Advanced AnalyticsSSRS | Media, Pennsylvania, [email protected]