New research from Ericsson shows the dramatic growth in mobile viewing over the last 4 years. It also shows that pay TV TV Everywhere has participated in virtually none of it.
Video viewing increases, at expense of the TV
According to Ericsson’s latest multi-country study TV and Media 2016, consumers are watching an hour-and-a-half more video a week than in 2012. This growth in viewing is due to the dramatic adoption of mobile devices. Since 2012, viewing on mobile devices has grown 4 hours per week. Some of that increase has come at the expense of the television. Consumers are watching 2.5 hours per week less on fixed screens today than in 2012.
Looking at US smartphone users, Ericsson says the vast majority of viewing (77%) is for ad-supported content. Facebook and YouTube videos likely account for much of that. SVOD services, like Netflix and Hulu, account for 20% of smartphone viewing. However, pay TV doesn’t seem to have made the transition to the smartphone hardly at all. Just 0.3% of smartphone viewing comes from TV Everywhere authenticate apps.
The data for the Ericsson study was collected during April and May 2016, which means Olympic usage is not included. This may have caused a spike in smartphone usage for video during August. However, this is bad news for pay TV operators. Their customers are still not installing and using operator portal apps, and those from content providers, like HBO GO and Fox Now.
Pay TV operator satisfaction is falling
There is more bad news for operators in the Ericsson study. Operators have been working to improve the overall experience of their services. Companies like Comcast and Cox have introduced new features like voice search, recommendations, and easier to use guides. They’ve also been working to improve customer support. This effort does not appear to be helping boost customer opinion of their service.
Ericsson reports that the net promoter score (NPS) for operators remains very low. The difference between the percentage of people that would recommend their pay TV service and the percentage that would not is just 14. This has slightly improved from last year, but it should be no cause for celebration.
SVOD (Ericsson calls these on-demand services) NPS increased from 36 last year, to 41 in 2016. That means the difference in satisfaction between SVOD and pay TV is growing, not shrinking!
Impact of mobiles caps on video consumption
We are all painfully aware of the impact of mobile data caps on video consumption. Most of us reserve our smartphone viewing for when we are on a WIFI network. Ericsson provides some graphic detail on the huge impact caps have on our mobile video consumption.
Using on-device measurement, the study looked at data consumption between mobile operators in the US market. One operator offered unlimited video streaming from several video services (although not stated this is almost certainly T-Mobile with its Binge-on zero rated video streaming.) It was compared to other data plans with standard data caps. The difference is remarkable.
For users with a standard capped mobile plan most data consumption occurs on WIFI networks. The older millennials (25 to 34-year-olds) in this group consume 85% of their data on WIFI and 15% on mobile networks. The same age group with an unlimited data plan consume 45% of their data through mobile networks, and 55% through WIFI. Similar huge increases are seen across all age groups.
Though it is intuitively obvious that removing caps encourages video consumption, the Ericsson data proves it.
There is lots more interesting data on the shifting habits of video consumers in the Ericsson study. I strongly recommend you check it out.
Why it matters
Ericsson data shows the dramatic increase in mobile video consumption over the last 4 years. It also shows pay TV operators are missing out on a lot of that growth.
Though operators are trying to boost their customer experience it looks like they are falling further behind SVOD providers in that department.
Allowing mobile customers to stream video without it counting toward their cap leads to a dramatic increase in mobile data consumption.