Consumer Awareness of ‘TV Everywhere’ Lagging

21 Jun, 2012 By: Erik Gruenwedel

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Cable, satellite and Telco operators reluctant to up resources to facilitate wider user adoption of on-demand video entertainment, analyst says

Mainstream consumers remain indifferent about TV Everywhere, due in part to cautious efforts by media companies and cable, satellite and telecommunications operators to educate subscribers about accessing content on demand over the Internet through connected devices, an analyst said.

Just 20% of pay-TV subscribers were aware of TV Everywhere provided by their operator in the first quarter of 2012, with 53% of those subscribers using the service at least once a month, according to data presented in a June 21 webinar by Parks Associates.

TV Everywhere is a platform designed to attract and retain pay-TV subscribers in an era of competing (and less expensive) over-the-top alternatives such as Netflix, Hulu, Google Plus and Amazon Prime.

“Is anybody watching these [TV Everywhere] services? Do they even know that these services are available?” asked Parks senior analyst Brett Sappington. “What we found is that by and large the answer is no.”

Despite TV ads, fliers and billing inserts heralding the virtues of TV Everywhere, the majority of pay-TV subscribers do not know that their TV provider offers repurposed content.

In a recent Parks survey of subscribers of multichannel video program distributors, 26% of AT&T U-verse subscribers were aware of TV Everywhere, followed by Cablevision/Comcast with 24%, Verizon Wireless (22%), Dish Network (19%), Cox Communications (18%), DirecTV (15%) and 12% among Time Warner Cable subs.

“If TV Everywhere services were originally designed to be a defense against over-the-top video services, this lack of [consumer] awareness is a significant problem,” he said, adding that current TV Everywhere users remain primarily early adopters.

Primary hindrances to wider TV Everywhere consumer adoption include MVPDs cautiously rolling out platforms in order to safeguard against user-interface failures, inadequate promotions, consumer fears regarding additional charges and misconceptions that TV operators even offer over-the-top video services, according to Sappington.

The analyst said a Dish representative told him consumer ignorance toward TV Everywhere is understandable considering the primary selling point in the satellite operator’s 30-second TV spot is driving subscriber additions of its bundled channel programs.

“TV Everywhere is just too small. It’s really not important enough for me to spend my marketing dollars on TV Everywhere rather than promoting my core service,” Sappington said the Dish rep told him.

The analyst said that other pay-TV operators unwilling to accept the opportunity costs required to promote TV Everywhere echoed the sentiment.

Sappington said other TV operators such as Verizon are focusing on transactional VOD as a backbone to their multiscreen video services. He said Verizon’s promotions are not about driving consumer awareness of TV Everywhere as much as they are intended to drive rental acquisitions of movies and TV shows.

He said MVPDs must segment marketing efforts toward separate consumers, including business and consumer and broadband, while OTT services can focus on a singular consumer.

“As a result, consumers whenever they are thinking of an online or premium video service … they’re thinking of these over-the-top players,” Sappington said.

Finally, the analyst said consumers have a fear about downloading an app, interacting with that app or beginning to watch content (even if its free) and wondering if it is going to cost them more money.

“What happens if I click a button wrong or don’t realize something and I end up getting a bill that includes charges for this extra video?” Sappington said, adding that consumers in this situation are then put in the position of having to fight with their TV provider over billing issues.

“Rather than risk that, they’re just not going to go there,” he said.

Meanwhile, video entertainment continues to be primarily consumed on the TV, including 20.4 hours weekly on the HDTV, 5.8 hours on the PC, 1.6 hours on a smartphone and 0.6 hours on a tablet computer.

That said, growth of video consumption going forward is more pronounced on devices other than the TV. In fact, 50% of tablet owners have increased their amount of video consumption during the past six months. Sappington said the increase underscores the significance of multiscreen video consumption among media companies, MVPDs and consumer electronics manufacturers.

“Mobile phone usage and tablet usage [for video consumption] still is supplemental to the TV,” Sappington said. “The vast majority of [video] viewing is still on the television.”
 

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