With an array of online options for viewing media — not to mention the
increasing amount of original content created for online audiences —
video streaming services have become a disruptive influence on the
traditional television business, this according to global research
consultancy TNS. While consumer’s preference is still television, TV
sets alone are no longer enough to satisfy the appetite for content,
driving the growth of online media and video streaming services.
In ReQuest®, a quarterly study into the telecommunication behavior of
over 20,000 U.S. households, TNS found that more than one-third (34%) of
households have streamed video within the previous month. Yet, the
majority of these streaming households also purchase traditional
Subscription Video service (e.g. cable, satellite, or fiber TV) – more
than one in four (26%) watch both Pay TV and streaming, compared to just
one in thirteen (8%) that only watch streaming video.
Pay TV still rules, but power is eroding
Even while the conventional model of “Pay TV Only” service still
represents a majority scenario (55%), it is steadily becoming less
commonplace. “The allure of streaming technology is furthering the
fragmentation of the consumer video market, resulting in weaker brand
affiliations, reduced customer loyalties, and higher defection risks
across all video distributors,” notes TNS Vice President Frank
Perazzini. “Given the emerging challenges from alternative channels, the
sustainability of traditional Pay TV service could be vulnerable if new
pricing models offer consumers access to the content they desire at
lower rates than are available today.” To defend their still-dominant
position, many Pay TV providers are strengthening their offers in order
to stay competitive through such enhancements as TV Everywhere and a
variety of mobile apps, which seek to deliver customers a user-friendly
interface for multi-platform and on-demand viewing.
Changing addresses leads to a change in allegiance
The shift toward online consumption of television has been a long time
coming, thanks to the dual advances in both technology and viewership.
Faster internet, more content, and more devices capable of streaming
high-quality video have created a larger and still-growing audience for
streaming video. Yet, one other factor driving the persistent growth of
consumer experimentation with and acceptance of streaming video is this
simple fact – people keep moving. That is, sooner or later, we all
change addresses for one reason or another, and this often affords us
the opportunity (or necessity) to try new communications providers and
According to the report, TNS found the prevalence of streaming behavior
is both higher and growing faster among households that moved within the
past year. Half (50%) of Mover households have used streaming in the
past month, compared to less than a third (32%) of Non-Mover households.
Furthermore, nearly one in six Movers views only
streaming video, compared to just one in fourteen Non-Movers. And, among
Movers, the overall penetration of streaming (50%) now exceeds the
penetration of households with only traditional Pay TV service (37%) by
“Although recent Movers comprise only about 8% of all households, there
could be enduring effects on household viewing behaviors over the long
term,” Perazzini states. “The considerably higher incidence of
households that only view streaming video among Movers hints at
streaming’s potential to supplant – rather than merely supplement
– traditional cable, satellite, and fiber video consumption.” Top
streaming providers like Netflix and Amazon Prime are aggressively
pursuing strategies, such as innovative pricing structures and exclusive
programming features, to attract existing Pay TV subscribers (commonly
called cord-cutters or cord-frayers) as well as new market entrants.
Although these providers’ subscription volumes have not yet reached the
level of industry heavyweights like Comcast or DirecTV, it is safe to
say that the expansion of streaming is already transforming the
fundamental nature of the consumer video experience.
TNS advises clients on specific growth strategies around new market
entry, innovation, brand switching and customer and employee
relationships, based on long-established expertise and market-leading
solutions. With a presence in over 80 countries, TNS has more
conversations with the world’s consumers than anyone else and
understands individual human behaviours and attitudes across every
cultural, economic and political region of the world.
TNS is part of Kantar, the data investment management division of WPP
and one of the world's largest insight, information and consultancy
groups. Please visit www.tnsglobal.com
for more information.
Kantar is the data investment management division of WPP and one of the
world's largest insight, information and consultancy groups. By
connecting the diverse talents of its 12 specialist companies, the group
aims to become the pre-eminent provider of compelling and inspirational
insights for the global business community. Its 27,000 employees work
across 100 countries and across the whole spectrum of research and
consultancy disciplines, enabling the group to offer clients business
insights at every point of the consumer cycle. The group’s services are
employed by over half of the Fortune Top 500 companies. For further
information, please visit us at www.kantar.com.