Market Insight

Device expansion key for pay TV as consumers go online

May 24, 2018  | Subscribers Only


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With the proliferation of connected devices both in and out of the home, the need to meet consumers’ expectations of accessing content anywhere and everywhere becomes ever more important.

The latest findings from IHS Markit’s Connected Devices & Media Consumption surveys from April 2018 found that more than half of respondents across five markets surveyed watch video content out of the home at least once a month or more, of which one in six did so daily. Those aged 17 to 24 over-indexed in out of home viewing, with 80% watching at least once a month, with a quarter doing so daily. Brazil sees the highest incidence of out of home video viewing, with two thirds of respondents viewing content at least once a week or more.

Viewing habits differ greatly between age groups, gender and other key demographic characteristics. In the US, male users are twice as likely to view video content out of the home on a daily basis as females, while in the UK they are nearly three times as likely.

 

Online video services are the go-to platforms for content

YouTube, Netflix and Amazon were the most popular video platforms as the first choice when looking for something to watch in the five countries surveyed, beating pay TV and broadcaster video-on-demand (VoD) services in most markets in the first quarter of 2018.However, the popularity of these platforms varied according to geography. The UK was the only country surveyed where a pay TV operator, Sky TV, maintained the top position with 30 percent of UK respondents claiming it is their first choice. Broadcaster VoD BBC iPlayer came third in the UK, following YouTube. Meanwhile in Japan, 84% reported YouTube as their first choice.

Netflix had the strongest crossover with pay TV across markets surveyed in Q1 2018. Netflix overlap with pay TV was the highest in Brazil, with three quarters of Claro TV and Sky Brazil customers taking Netflix alongside their pay TV subscription. Amazon overlap with pay TV however, remains low in Brazil, where Amazon Instant Video is only available on a standalone basis, with minimal localization of content and where local players Claro Video and Globo Play see higher uptake.

Pay TV operators globally are responding to the growth in online video viewing by expanding distribution of their multiscreen services across devices and bringing third-party apps onto their own set-top boxes. This allows them to now only capture viewing occuring on other devices, but also to ensure media consumption, whether video or not, takes place within their ecosystem.

Online video platforms benefit from extensive reach with relatviely low entry costs, covering customers from across the various pay TV platforms and devices. This threatens viewership and value perceptions of pay TV services and consequently can result in churn. Bringing online video services to set-top boxes allows pay TV operators to maintain and control their customer relationships and experiences, while presenting their platforms as the best way to find and view the widest variety of content. In the UK, Virgin Media customers are twice as likely to have a Netflix subscription than Sky TV customers, highlighting the benefits of partnerships and content discovery integration.

 

Geography
Brazil Germany Japan UK USA
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