Follow the Consumer

2 Oct, 2013 By: Thomas K. Arnold

The PricewaterhouseCoopers study we wrote about here is extremely interesting and provocative on many levels, but the underlying message is simple, clear and one we’ve heard myriad times before: Given their druthers, consumers prefer their entertainment cheap (ideally, free) and easy.

That’s why they are drawn to Netflix, which is the hands-down winner on both fronts.

Two findings stand out and should be of keen interest to anyone in the home entertainment business. One is that 57% of respondents, a clear majority, prefer on-demand viewing versus live broadcast. Our need for instant gratification, I believe, is what’s kept our business alive for so long — and while a good chunk of this “I want it now!” crowd will turn to streaming, there’s still a big segment of the population out there that 1) doesn’t have a web-connected TV and 2) wants to watch movies on the widescreen, not on their computer. This explains why cable and satellite delivery remain the primary sources of video consumption — and at the same time gives the physical media crowd something to exploit.

Cable and satellite remains popular largely because everyone’s familiar with it, and it’s a relatively simple process. But both advantages are shared by DVD and Blu-ray Disc. We’re all very, very familiar with discs, and while on-demand viewing gives us essentially the same control over what we watch, discs provide us with far better picture and sound — something I think we as an industry still need to more aggressively promote.

Another finding I found interesting is the fact that social-media platforms such as Facebook and Twitter, an integral part of so many lives these days, aren’t being deployed to finding online video anywhere near as much as one might think. From our story: “Just 4% of respondents said they use social media for suggestions of online video programming — only slightly better than Netflix and Hulu at 5%. This compares to 59% of respondents who rely on a family member or friend for programming ideas.”

To me, that underscores the No. 1 challenge of digital distribution: discovery. And to our friends at the studios who are involved in digital distribution, this should be a call to arms: We need to devote more resources, both brainpower and dollars, toward finding a better mechanism for consumers to find what they want to watch — with the underlying premise being that quite often consumers don’t quite know what they want to watch. We need to come up with a way that lets viewers search movies not by title, actor or category, but by, say, spectacular crash scenes, intense kisses, compelling soliloquies (anyone for Dennis Hopper in True Romance?), or epic battles.

Elsewhere in the study, the fact that just 10% of respondents like “binge viewing” of TV series is a bit surprising. I would have thought more people watch entire seasons, or even series, of TV shows from start to finish, but what’s not clear from the study is what exactly constitutes binge viewing. I can’t see myself spending an entire weekend watched nothing but “Dexter,” 16 hours a day — but watching the entire series over the space of three or four months, an episode a night, with periodic breaks to get in a movie or two, that’s more like it.

The strong yen for original programming is interesting as well, and coincides with the growth of YouTube, the accolades for Netflix shows, and other indicators that consumers — particularly the young’uns — are watching more and more programming that’s generated outside the Hollywood system.

If there’s a lesson here for studio executives, it’s this: When discussing the intersection of entertainment and technology, we’re focusing far too much on distribution and not enough on content creation. We need to look at technology as a lot more than simply new and better ways to get our traditional content into consumer homes (or smartphones, or tablets). We need to look at technology as a way to create new and different content that doesn’t begin at the movie theater or on the TV screen, content expressly created for these new distribution mechanisms.

Our YouTube channels should go beyond promoting our films and TV shows — they should be used to create an entirely new and, hopefully, additive entertainment experience.

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About the Author: Thomas K. Arnold