"Streaming TV" Expands Its Footprint:
Four Things You Need to Know about Consumers
and "Over-the-Top" TV
By David Tice
The growth of online video viewing through TV sets has been fitful but consistent. Consumers clearly want this merging of the two technologies to continue – though they are not overly impressed with the devices built to make it happen.
Roku, AppleTV, and GoogleTV have all so far failed to find their footing in the marketplace. But two forces have picked up the slack and are pointing the way to the future of this lucrative technology.
Knowledge Networks has been tracking the growth of various "over-the-top" viewing options since 2005, as well as consumers' evolving relationship with the different devices and services. Here are four essential insights from our latest dedicated "OTT" report presented earlier this month at the Collaborative Alliance meeting in New York City.
1. Videogame consoles are the OTT hub
On a total population basis, one quarter of all persons 13-54 use a videogame console at least once a month for any type of alternative viewing — physical or digital — of TV programs or movies. (This figure jumps to nearly 4 in 10 among persons 13-29). Add in time spent playing videogames, and you can see the videogame console is a powerful media gatekeeper.
Consider also that the proportion of those viewing using a PC is only slightly higher than those viewing on game consoles - if your organization has been concerned about PC viewing, it better also be concerned about console viewing.
2. Netflix is the OTT gatekeeper, for TV shows and movies alike
We found that 35% of Americans age 13-54 say they use Netflix at least once a month. Among these monthly users, in total they report watching 5.1 TV episodes and 3.5 movies a week using Netflix. Extending that out to the total population, that means that the average American is watching about 2 TV episodes and 1 movie A WEEK using Netflix! This makes the service an unrivalled gatekeeper for secondary TV and movie revenue alike. (Note: Our research was conducted just before Netflix announced its price and service changes.)
3. Netflix's effect on regular TV viewing: Almost nil
For the most part, the effect of Netflix use on traditional TV use is a wash. Just as many people are watching less as watch more, with the vast majority saying it is making no difference. The one genre where we saw a negative tilt was for original TV movies, a genre now the domain of cable networks rather than broadcast.
4. DVDs are still a major source of viewing
While "pure" OTT options (like streaming video) are gaining ground, DVDs and DVR recordings are still the most common method of viewing TV programs and movies outside of traditional telecasts. Almost two-thirds of the full 13-to-54 group watch DVDs via a TV set monthly, and another 11% have watched on a DVD on a PC. By contrast, hot-button devices like smartphones and tablets each garner less than 5% use on a monthly basis – and much lower if looked at on a weekly basis.
Takeaway: The next OTT level
Because the videogame/Netflix continuum skews strongly toward younger audiences, there is still room to take the OTT market to a new level with mainstream, older viewers. Formulating devices and interfaces that feel approachable to late and early adopters alike will be key to this transition – along with providing access to wider arrays of content. The benefits for this next version of OTT will be powerful for content providers and interfaces alike. Stay tuned!
David Tice is Vice President and Group Account Director in the Media team at Knowledge Networks. He has played a key role in hundreds of custom media projects and directs KN's The Home Technology Monitor™.