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US connected TV on growth trajectory

American households continue to connect their television sets to the Internet at a rapid pace, and they’re doing so using a greater variety of devices. The 2016 Magid Media Futures Video Entertainment Study from research-based consulting firm Frank N. Magid Associates indicates three-quarters (74 per cent) of online consumers now have what’s considered a Connected TV — that’s up sharply from 59 per cent a year ago.

Until recently, video gaming consoles stood alone in first as the top device to bring online video to the TV. Now they essentially share that lead with Internet streaming device category (e.g., Roku, Apple TV, Amazon Fire TV, Google’s Chromecast).

“We’ve seen the proliferation of Internet streaming devices increase by more than half over the past year,” said Maryann Baldwin, vice president of Magid Media Futures. “Consumers realise they can choose from solid products from brands they trust — and at affordable price points. We expect to see this surge in popularity continue.”

At the same time, Smart TVs also continue to make big strides in the US; they’re just behind video game consoles and Internet streaming devices as a means by which consumers can watch video on their TV screen.

“Regardless of how they’re connecting for video programming or movies, we’re witnessing a real shift back toward the TV set as the primary screen in US households,” said Baldwin. “Mobile devices, tablets, and smartphones all play their role, but there’s still much to be said for the shared experience of watching together on the largest screen.”

Watching video entertainment on the television goes hand in hand with a willingness to pay for that programming. In fact, the majority of TV-screen streamers now prefer a paid model for their TV show and movie viewing. Consumers’ willingness to pay a monthly subscription fee for programming without commercials integrated tends to be lower among those who would be paying to watch on a smartphone, tablet, or other mobile device.

What’s more, TV shows and movies are the gold standard of premium content online. More of those who watch TV shows and movies online in the US do so via a paid subscription (75 per cent) than through free sources (68 per cent).

“Streaming video on demand services have succeeded in creating an experience that is superior enough to non-pay sources that consumers are willing to pay for that experience to view their desired content,” said Jill Rosengard Hill, senior vice president at Magid. “That experience entails great search capabilities, multiplatform access, and often an ad-free presentation.”

The growing usage of streaming video is linked closely with the increasing availability of quality original content. Among a range of viewing options offered in the study, original SVoD programming stands out as the one consumers are most likely to take advantage of on a growing basis. Nearly 40 per cent of these viewers expect to spend more time with this content in the next six months, compared with only 10 per cent who say they will watch this way less often. Following closely behind original series in momentum is binge viewing.

“Eight in ten of those who stream content to their TV watch original series from SVOD services,” said Hill. “That includes Netflix, Amazon, and Hulu, along with a growing number of services like NBCUniversal’s Seeso. The momentum behind this content attachment tells us the rapid growth will only accelerate in the coming months.”

The Magid Video Entertainment Study findings indicate password sharing has a lot to do with expanding engagement with SVOD brands. That’s certainly true for Netflix, but it also plays a significant role for lesser-known services such as CBS All Access, Sling TV, and YouTube Red (all of which double their viewing base with password sharing included).

The study has tracked and captured emerging consumer attitudes and behaviours related to television entertainment for more than 15 years, beginning with the early days of digital and high-definition television, the advent of On Demand, and DVRs. The research has expanded over the past few years to include the adoption and growing use of streaming entertainment and Connected TV. The 2016 study was conducted in March, surveying 1,600 online consumers ages eight and older. The study covers use of wired and mobile devices, video streaming platforms and brand attitudes, genre preferences, early viewpoints on virtual reality, and future purchase and viewing intentions, and other related topics.

 

 

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