Research: Viewers drive broadcast change
November 18, 2010
A UK research study conducted by Forrester Consulting on behalf of Cisco, investigating consumer viewing habits and expectations of TV and Internet-delivered TV reveals that consumers are dictating where broadcasters, service providers and production companies invest their time and money when developing new technologies and services.
The study shows that continued consumer interest in next generation TV such as high definition TV (HDTV), 3DTV, on-demand and live streaming are pressuring major broadcasters and service providers to improve standards and offer a broader, more integrated service.
The study shows HDTV is fast becoming mainstream in the UK. However, the imminent arrival of 3DTV services will again raise consumers’ expectations of quality, just as DVD did when it replaced VHS in the 1990s.
It’s not just consumer’s interests that are causing this sea change; it’s their viewing habits too. Multiple generations of TV viewers are creating new markets and relationships for media companies. For example, simultaneous Internet use while watching TV is a common activity among young consumers now. Over 60 per cent of those aged 16 to 35 watch TV and browse the Internet at the same time, and most likely to do so on a laptop or PC, as this age group is the least likely to own a TV set.
Young Consumers leading development of ‘Social TV’
‘Social TV’, the idea of discussing TV online while watching it, has much greater interest to young consumers aged under 25. Among 16 to 24 year olds, 47 per cent like to chat online with friends while watching TV, compared with 20 per cent or less of those in older age groups. Similarly, 28 per cent of 16 to 24 year olds like to discuss the TV programme they are currently watching online with friends, compared with under 10 per cent of all older groups.
This audience will be most likely to embrace simultaneous consumption of TV and Internet video. Coupled with the age group’s device ownership, it’s a fair indication that in the future a shift to Internet TV and interactivity will become more commonplace across all ages groups.
The Next Dimension
With 3D technology now common place in cinemas, at home with the launch of the first UK’s first commercial 3DTV channel, and on pre-recorded Blu Ray discs, consumer appetite for such services is high. 43 per cent of 16 to 24 year olds expressed interest in 3DTV and 33 per cent of those aged 25 to 34. It would seem that the TV market is going through the largest transformation since the move from analogue TV to digital in the 1990s.
Alongside the ubiquitous home computer, new devices such as tablets and large screen smartphones are now enabling online TV consumption anywhere in the home. The freedom these wireless devices enable has significantly changed consumer TV viewing habits. 70 per cent of online UK consumers now access the Internet in the living room, making it the most popular part of the home for web use.
Quality over Cost
While Internet Service Providers may choose to charge consumers a premium for faster speeds or a better quality of service at the same price, currently broadcasters don’t. Interestingly, the study shows 22 per cent of consumers say they would pay for better video picture quality, if they could guarantee it.
According to the Forrester and Cisco study, young consumers would not necessarily object to paying for premium picture quality and prefer to pay per item for media, rather than the traditional subscription payment model. This parallels the pre-pay model that has proved popular in the mobile industry and led to tremendous mobile adoption by teenagers.
Phil Smith, vice president and CEO, Cisco UK and Ireland said: “With video predicted to make up more than 91 per cent of all internet traffic by 2014, it is clear that the growth of online video represents the next significant stage in the development of the Internet. This is part of a major shift in the way content is delivered and consumed but it also represents a challenge to Internet Service Providers and media companies. The fact that consumers hold ISPs and content providers equally responsible for any drop in video quality is a clear sign that these industries need to work together to ensure that are able to deliver a consistently high quality service to consumers.”