On-demand viewing almost level with linear TV
James R | On 14, Sep 2014
It is no secret that video on-demand viewing is on the up, but new research suggests that it is now almost level with linear TV in the US.
75 percent of people watch any type of streamed video several times a week or more, according to a study by Ericsson, compared to the 77 percent who watch scheduled broadcast TV several times a week.
It is a change that has been a long time coming: even before commercial VOD services, the idea of watching content when it suited the viewer was encouraged by technology such as Digital Video Recorders (DVRs), which continues – as Ericsson rather poetically puts it – “to disassemble linear TV channels”. Indeed, the report argues that traditional TV channels are increasingly considered “a source from which consumers can harvest programs and movies” for later viewing.
“In the future,” says Niklas Heyman Rönnblom, Senior Advisor at Ericsson ConsumerLab, “consumers will not accept paying for inflexible managed TV packages in order to get access to the content they love.”
But that future is increasingly part of the present, with “binge-watch” now added to the OED – a trend that has definitely been fuelled by VOD services, not just because of the ease of access to content, but the cost; one monthly payment giving access to a range of titles. It is telling that only 14 per cent of Ericsson’s respondents said that T-VOD (transactional, or pay-per-view, video on-demand) services are a cost in their monthly TV budget, compared to 27 per cent who factor S-VOD (subscription video on-demand) into their outgoings.
People have a tendency to think about content as either being premium (favourite TV shows) or secondary (older movies), with viewing divided up in the same way: between special occasions and everyday behaviour. While subscription services “rarely cater” for the full range of viewing habits, often lacking special occasions/premium content (e.g. sport), Ericsson notes that “it quickly becomes integrated into their basic viewing behaviour”. Indeed, binge-viewing becomes increasingly the norm among S-VOD customers: 56 per cent of subscribers prefer it when all TV episodes are released at once from a series, ahead of 45 per cent of non-S-VOD users.
The study also looks at the other growing trend among viewers: mobile devices. Mobile access is not always possible, either due to signal or technological compatibility issues, but since 2012, the number of people that are prepared to pay for accessing TV content on any device has increased by 25 per cent. In that time, smartphone viewing time has increased by 15 per cent. People still like that big screen in their living room – living room screenings TV viewing has held steady – but those who watch on computers are increasingly moving towards smaller, more flexible screens. As a result, viewing on desktops has decreased from 2012 from 8 hours to 6 hours, while phone and tablet has increased.
Ericsson also show that a surprising number of consumers are interesting in 4K, ultra high-definition (UHD), despite its high costs: for 60 per cent of consumers, HD quality is a very important aspect of their optimal TV/video experience, while 4K is important to 43 per cent.
However people watch or in what quality, though, the findings indicate the growing normality of VOD. While the average US TV viewer spends USD 85 per month on managed TV, on-demand video and buying/renting DVDs, just 8 per cent of that goes on physical media (down from 21 per cent in 2010). On-demand spending, on the other hand, has more than doubled.
“The TV landscape is changing from one where traditional TV providers and physical media dominate and the consumer experience is inflexible,” comments Rönnblom. “Nowadays, new aggregators enable consumers to decide what they want to watch and pick-and-mix their own services, something that 5 out of 10 consumers prefer over the traditional TV bundles.
“It will be up to brands and service providers to build compelling consumer experiences and explore new business models that target the needs of the user.”