The disruptive force of multiscreen is still gathering strength as the flight from big screens to mobile connected devices reaches new heights, according to a report from global IT consulting and outsourcing group Accenture. The report called ‘Digital Video and the Connected Consumer‘, brings mixed messages for traditional broadcasters and pay TV operators, suggesting that they may actually be well placed to retain a dominant position in multiscreen video services delivered over the Internet, but only if they move in quickly with compelling second screen offerings to capitalize on their brand.
The research found that traditional broadcasters as well as major pay TV operators have a strong advantage over new market entrants because consumers assume they will continue to deliver a higher quality of experience over the Internet than emerging OTT providers. To some extent the burden of proof over online video quality lies with new entrants rather than established providers. But the window of opportunity may be short, given that the leading OTT providers such as Netflix are investing heavily in video quality in various ways including building out its own CDNs and starting to offer UHD content.
Behind this observation lies a slight paradox, which is that although the multiscreen exodus is accelerating, consumers are increasingly concerned over quality of online services. According to Accenture’s analysis, 89% of consumers watch long form video on connected devices, but many report issues with their viewing experience. The main complaint among more than half of respondents watching online video was poor Internet connectivity, with buffering, or the time it takes for video to start playing, cited by 33% as a concern, while loss of sound or distortions during play was another major concern for 32%. But 42% had a quite different concern, citing too much advertising. Another concern was lack of content variety online, with the best premium content such as movies and live sports not always available (see separate story in this issue about what that does to increase piracy).
These concerns do have a silver lining for operators, since many respondents indicated they would be willing to pay more for online video services that included greater content variety, less advertising, and better video quality. The implication for service providers is that they need to continue investing in their broadband delivery infrastructures, while working to acquire premium content rights, which in turn will require further efforts on the security front to allay rights holders’ concerns over illicit online content redistribution.
The research also indicated it would not be enough for traditional service providers merely to repackage existing services for multiscreen and that they must tailor them properly for each target platform, while maintaining a consistent UI across all devices.
One notable aspect of the Accenture survey was that it found the exodus from the big screen was accelerating across all forms of content, all age groups and in all the principle markets. It is one of the most comprehensive so far, conducted online in October and November 2014 on 24,000 consumers in 24 countries embracing all principle developed and emerging markets, including Brazil, China, France, Germany, India, Japan, Mexico, Russia, Saudi Arabia, UK and USA. The sample size in each country was proportional to the online population, with respondents ranging in age from 14 to 70 or more.
As might be expected, though the scale of the swing to multiscreen declined with age, with 14-17-year-olds abandoning the big screen by as much as 33% over the year for films and TV shows and 26% for sporting events. The decline was less striking, but still strong among 18-34-year-olds at 14% for movies/ TV shows and 12% for sporting events, while for 35-54-year-olds it was 11% and 9%, respectively. Among the elderly group of 55 and older, it was 9% and 1% respectively.
We have no breakdown between countries, but other evidence suggests that the swing is strongest in developing countries and poorer regions where fewer people have big screen TVs and also where penetration of HD pay TV service is lower. Naturally there, the draw to the big screen for higher quality is less and pictures may even look better on tablets.
While pay TV operators and especially broadcasters can ride this multiscreen trend successfully, as some already have, the implications for TV makers are of course very serious. They have already had to cope with the decimation of the secondary TV market as people have abandoned traditional sets for tablets and laptops for viewing around the house in bedrooms and kitchens. But at least in the early days of multiscreen the big screen in the living room was largely left intact. There was even some evidence that the growth in online viewing actually boosted engagement with the big screen, as people were using smartphones, tablets and laptops to watch content while travelling or when they would not be in front of the big box anyway. Research from comScore and others published between 2011 and 2013 suggested that people would often finish off viewing something on the big screen that they had started online via a mobile device. Or they might decide to watch a movie on the big screen after viewing a clip on their mobiles.
But this rosy picture of synergy between the big TV and multiscreen started to evaporate from 2013 onwards. This became evident for the USA in Nielsen’s quarterly viewing reports during 2014 especially. The latest available covering Q4 2014 found that levels of decline are increasing, if not as rapidly as Accenture suggests, with an overall fall of 4.6% year on year, including live TV and time-shifted viewing. That compares with a 4.2% year-on-year decline in Q3 and 2.1% in Q2. Excluding time-shifted viewing, total live TV consumption was down 5.5% year on year to 114 billion person-hours of live TV video consumption.
The big question for TV makers is whether this stampede will continue to grow or stop when it reaches a new point of equilibrium. The critical point is whether people will stop buying new TVs as often as they come to watch them less. This will not necessarily be the case, for people may still want to return to the big screen for viewing perhaps new movies or the major sporting events at the best quality possible, even if they spend more time watching other stuff on connected devices.
Although the Accenture survey notes a switch to multiscreen across the board for all content types, it could still be that people are drawn to the big screen on some occasions. This is where UHD comes in, for TV makers will be more anxious than ever to trumpet the additional quality provided on big screens where it will give a more immersive experience. It is true that UHD content will also be available online on connected devices, but there will be less of it and the increase in perceived quality will be not so marked for smaller screens.