Having the whole family crowd around one screen in the living room is rapidly becoming a thing of the past, as a plethora of options have begun to pop up around the average home, be they PCs, TVs, handheld consoles, smartphones or tablets. But will all these new devices change the way people watch TV?
An interesting article in TechCrunch on Tuesday claimed that an estimated 800,000 U.S. households had cut the cable cord in favor of watching their favorite shows online instead. Indeed, with options like Hulu, Netflix, ABC, iTunes and more, there aren’t too many shows one can’t find online these days, which rather begs the question why anyone would need 800 channels chock full of rubbish. Let alone pay for it.
Armed with statistics from the Convergence Consulting Group, TechCrunch reported that by the end of 2010 the number of online TV watchers would have doubled to 1.6 million.
While this may sound significant, it isn’t as huge as it initially seems, considering the cable/satellite/telco TV industry is a whopping $84 billion affair.
Still, despite currently being a drop in the ocean, the number is on the rise, with about 17% of total weekly online TV viewers watching at least one or two episodes of a full-length show online, up from 12% last year and predicted to grow to 21% next year.
Meanwhile, the Wall Street Journal notes that since the launch of Apple Inc.’s iPad, ABC’s free streaming app has been downloaded over 205,000 times with viewers already racking up an astounding 650,000 streamed TV episodes and several million ad impressions.
That number is even more significant and telling if one takes into account that approximately 450,000 iPads have been sold thus far, meaning almost one in two users have downloaded the app.
According to market research outfit, In-Stat, 40% of U.S. broadband subscribers are extremely or very interested in purchasing an iPad, while another 30% are somewhat interested. And that’s before other tablets hit the market.
So tablets, it seems, could be paving the way for a veritable surge in online TV consumption.
Keith Nissen, a principle analyst at In-Stat agrees that the viewing of TV shows on the iPad reflects both the increased adoption of online TV viewing and the proliferation of web-enabled devices that can be used to acquire online video content.
Nissen told RCR that 26% of consumers view an online TV show more than once per week, while 50% of 18-24 year-olds and 40% of 25-34 year olds view online TV shows more than once a week.
“Even older adults are increasing going to the Internet to catch-up on recently broadcast TV shows,” Nissen said, adding, “this change of behavior is happening very rapidly, and is independent of technology adoption attitudes (even those who adopt technology slowly like the idea of viewing their favorite TV shows on demand).”
Of course, cable TV has done much to adapt itself over the past couple of years, making itself more user friendly with video-on-demand, and HD channels, but Nissen says his research indicates that approximately 45% of total U.S. broadband households download digital entertainment content from the Internet. Once downloaded, the content is viewed on a plethora of screens, including the TV, PC, and mobile devices.
42% of U.S. broadband subscribers have a video-enabled mobile handset, according to In-Stat, while 40% of consumer households have portable media players that are video-enabled.
What of being able to record your favorite show on a DVR though? Portable players don’t allow that … or do they?
Recently, Qualcomm Inc. announced its FLO TV broadcasts would get new features later this year, including the ability to record shows off the air. The firm hopes this added flexibility will give mobile TV viewing figures a boost, letting them watch shows when they like.
The company also said it would let viewers buy daily service packages, rather than forcing customers to commit to $10 to $15 per month subscriptions for a package of a dozen channels. The only catch is that FLO TV is only currently available on a small number of devices, although Qualcomm is demoing a device that takes the FLO TV signal and rebroadcasts it over Wi-Fi, making it accessible to other smartphones.
Also, in a bid to make mobile TV even more of an interactive experience, Qualcomm explained it would also be adding in some viewing software which would allow viewers to click for more information about a show or click to buy an advertised product.
“By 2014, we expect there will be over 100 million Web-enabled [consumer electronic] devices in U.S. broadband connected homes, and this does not take into account mobile devices,” said Nissen, continuing that with such a huge installed base of devices that can be used to acquire online video content, TV content producers would want to make their content available on all these devices.
Having said that, however, Nissen warns that consumers have overwhelming indicated they won’t pay multiple times to acquire the same content on multiple devices, leading to the TV Everywhere subscription solution.
TV Everywhere lets consumer pay monthly subscriptions to get free access to the content on a variety of devices, which is great for service providers, but not so great for content producers.
“The bottom line is that if consumers have a plethora of devices that enable them to acquire online TV content when and wherever they desire, then consumers will get the content they want one way or another,” notes Nissen.
But if content producers and service providers try to charge high fees for their content to be delivered to each device, then consumer behavior will likely follow that of the music industry, where content acquisition is dominated by P2P file sharing or low-priced iTunes downloads.
If the video industry doesn’t want that to happen, it will have to find a decent monetization strategy which also meet consumers’ expectations for multi-device access to on-demand TV content, and lots of it.
