|By Business Wire||
|July 23, 2014 01:00 PM EDT||
With an array of online options for viewing media — not to mention the increasing amount of original content created for online audiences — video streaming services have become a disruptive influence on the traditional television business, this according to global research consultancy TNS. While consumer’s preference is still television, TV sets alone are no longer enough to satisfy the appetite for content, driving the growth of online media and video streaming services.
In ReQuest®, a quarterly study into the telecommunication behavior of over 20,000 U.S. households, TNS found that more than one-third (34%) of households have streamed video within the previous month. Yet, the majority of these streaming households also purchase traditional Subscription Video service (e.g. cable, satellite, or fiber TV) – more than one in four (26%) watch both Pay TV and streaming, compared to just one in thirteen (8%) that only watch streaming video.
Pay TV still rules, but power is eroding
Even while the conventional model of “Pay TV Only” service still represents a majority scenario (55%), it is steadily becoming less commonplace. “The allure of streaming technology is furthering the fragmentation of the consumer video market, resulting in weaker brand affiliations, reduced customer loyalties, and higher defection risks across all video distributors,” notes TNS Vice President Frank Perazzini. “Given the emerging challenges from alternative channels, the sustainability of traditional Pay TV service could be vulnerable if new pricing models offer consumers access to the content they desire at lower rates than are available today.” To defend their still-dominant position, many Pay TV providers are strengthening their offers in order to stay competitive through such enhancements as TV Everywhere and a variety of mobile apps, which seek to deliver customers a user-friendly interface for multi-platform and on-demand viewing.
Changing addresses leads to a change in allegiance
The shift toward online consumption of television has been a long time coming, thanks to the dual advances in both technology and viewership. Faster internet, more content, and more devices capable of streaming high-quality video have created a larger and still-growing audience for streaming video. Yet, one other factor driving the persistent growth of consumer experimentation with and acceptance of streaming video is this simple fact – people keep moving. That is, sooner or later, we all change addresses for one reason or another, and this often affords us the opportunity (or necessity) to try new communications providers and access types.
According to the report, TNS found the prevalence of streaming behavior is both higher and growing faster among households that moved within the past year. Half (50%) of Mover households have used streaming in the past month, compared to less than a third (32%) of Non-Mover households. Furthermore, nearly one in six Movers views only streaming video, compared to just one in fourteen Non-Movers. And, among Movers, the overall penetration of streaming (50%) now exceeds the penetration of households with only traditional Pay TV service (37%) by double digits.
“Although recent Movers comprise only about 8% of all households, there could be enduring effects on household viewing behaviors over the long term,” Perazzini states. “The considerably higher incidence of households that only view streaming video among Movers hints at streaming’s potential to supplant – rather than merely supplement – traditional cable, satellite, and fiber video consumption.” Top streaming providers like Netflix and Amazon Prime are aggressively pursuing strategies, such as innovative pricing structures and exclusive programming features, to attract existing Pay TV subscribers (commonly called cord-cutters or cord-frayers) as well as new market entrants. Although these providers’ subscription volumes have not yet reached the level of industry heavyweights like Comcast or DirecTV, it is safe to say that the expansion of streaming is already transforming the fundamental nature of the consumer video experience.
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and customer and employee relationships, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world.
TNS is part of Kantar, the data investment management division of WPP and one of the world's largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information.
Kantar is the data investment management division of WPP and one of the world's largest insight, information and consultancy groups. By connecting the diverse talents of its 12 specialist companies, the group aims to become the pre-eminent provider of compelling and inspirational insights for the global business community. Its 27,000 employees work across 100 countries and across the whole spectrum of research and consultancy disciplines, enabling the group to offer clients business insights at every point of the consumer cycle. The group’s services are employed by over half of the Fortune Top 500 companies. For further information, please visit us at www.kantar.com.
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