nScreenMedia OTT multiscreen media analysis

Why 21% TV Everywhere usage is not good news for operators

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NPD has some purported good news for operators: TV Everywhere is in use by 21% of pay-TV subscribers. Unfortunately, this news is far from new, and also far from good.

The data from NPD states that 21% of pay-TV subscribers use their operator’s TV Everywhere service once a month or more. The company goes on to say that, of those homes with pay-TV and a subscription to an OTT service like Netflix or Hulu Plus, 25% use their operators TV Everywhere service at least once a month. This led Russ Crupnick of NPD to comment: “Though some SVOD <Netflix et al.> subscribers may be cutting the cord, the evidence is that the overwhelming majority are not only keeping the cord, they are lengthening it through aggressive use of TV Everywhere.”

Should operators be pleased with the performance of TV Everywhere based on NPD’s numbers? Earlier this year Digitalsmiths released data showing that 21% of pay-TV subscribers had downloaded the TV Everywhere client of their operator. The company went further, analyzing how frequently those that had downloaded the app actually used it. 68% used the app once a week or less. Put another way, just 6.7% of pay-TV customers are making operator provided TV Everywhere apps part of their regular television lives.

More shocking is why just 25% of pay-TV subscribers that are also Netflix customers are using TV Everywhere. This is a group accustomed to watching TV through the Internet. According to Netflix, the company streamed 4B hours of content in the first quarter of 2013. That works out to over an hour per day per subscriber. Yet, despite the fact that they have access to 10s of thousands of hours of quality TV content at no extra charge through TV Everywhere, 75% choose not to use it at all. Hardly what one might call “aggressive use”!

Even pay-TV industry partners realize there’s a problem. John Martin, Turner Broadcasting’s head, commented at The Cable Show that he “couldn’t figure out how to use” TV Everywhere. And the problem isn’t limited to operator TV Everywhere. Nancy Dubuc, A&E’s head, recently commented: “Our TV Everywhere app has been downloaded 11 million times. But the authentication of the app is not that good!”

In the soon to be released free report View My Video – Consumer Digital Media Consumption, nScreenMedia confirms Ms. Dubuc’s concerns about usage of authenticated apps. The report will reveal that authenticated premium channel apps, such as HBO Go and Showtime Anywhere, together consume a total of 7% of the average online video viewer’s time spent watching OTT video. Netflix alone consumes 22%.

Whether you think cord cutting is real or not, nobody would dispute that consumers are watching a lot more video online. It is here that the battle for consumer attention is being fort today. Operators must do a better job of competing for their own customer’s eyeballs and attention online. Though it may not earn them a nickel more revenue, it is the best investment they can make today to protect pay-TV revenue streams for tomorrow.

Why it matters

The fact that 21% of pay-TV subscribers are using operator TV Everywhere services might sound like good news.

Dig a little deeper and other data reveals that just 7% of pay-TV subscribers are regularly using TV Everywhere.

The industry must do better if it is to remain relevant to subscribers, who are spending an increasing amount of their time watching video online.

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