by Bill Snyder

Video on demand continues to kill big cable

Sep 04, 2015
Consumer Electronics

A new global survey of more than 20,000 people shows that they value on-demand programming, mobile video, and lower prices, and traditional TV viewership continues to decline.

The television world is changing even faster than many of us think. A survey of more than 20,000 TV viewers around the globe found that consumers spend more time watching online video-on-demand and streaming video to mobile devices, and they’re doing without traditional pay TV providers.

The marked shift in viewing habits during the last few years will likely put even more pressure on the Comcasts and Dish TVs of the world, as consumers demand the freedom to watch what they want, where and when they want, without being tied to bloated, expensive cable TV bundles.

Consumer eyes shift to video on demand

Ericsson’s 2015 “ConsumerLab TV and Media Report” found that consumers now spend 6 hours per week streaming on-demand TV series, programs, and movies online — more than double the equivalent 2011 figure. When you include recorded and downloaded content, 35 percent of all TV and video viewing is on-demand.

Teenagers are very likely to watch video on mobile devices. The study found that nearly two thirds of teenagers’ total TV and video viewing is done via smartphone, tablet, or laptop, and 53 percent of millennials watch TV on these devices. Older people aren’t immune to the lure of the small screen, either; across all age groups the number of consumers watching video on their smartphones has increased 71 percent since 2012, according to the report.

Generational differences are significant when it comes to conventional pay TV, as well. Eighty-two percent of the people between the ages of 60 and 69 years old say they watch conventional TV every day, but only 60 percent of millennials do. That’s bad news for pay TV providers that want to maintain their subscriber bases.

Binge watching, something that used to mean repeated trips to the video rental store, is also on the rise. Nearly nine out of ten consumers— 87 percent to be exact — who subscribe to on-demand services such as Netflix, Amazon Prime, and HBO, binge view at least once a week.

You probably know people who have never had a cable subscription, and you probably think they’re not interested in streaming TV. However, 22 percent of the so-called “cord-nevers (as opposed to cord-cutters who have abandoned cable) already pay for a la carte video offerings.

Bad news for big cable

Bad service, high prices, bundles with unattractive prices, are just some of the reason so many people are abandoning conventional pay TV. Here’s another good reason the survey uncovered: As many as half of the people who watch what Ericsson calls “linear TV” say they have trouble finding the programs they want to watch. That number swells to 62 percent of viewers age 25 to 34, a key demographic.

Ericsson conducted more than 20,000 online interviews in 20 major markets around the world, and with the aid of Nielsen collected data from more than 25,000 Android and iPhone users.

The good news for the entertainment industry is people want to watch TV. They don’t, however, want to watch it in the same old ways, and that’s bad news for cable and satellite providers.