What we know as the traditional Television model is about to change in drastic ways. There are several things at play here that would point to some major changes on the near horizon. First, let’s talk about the issue of time shifting. According to Forrester Research, the idea of an “on-demand” revolution is upon us. The notion that consumers can watch what they want; when they want it is now essentially permanently ingrained in our collective psyche. It’s quickly becoming the standard rather than the exception. According to a recent poll in the NY Times, for now it seems consumers say they are still dependant on their TV’s. So maybe all the hype is just that, hype not reality. Not so fast. Let’s look at a few recent pieces of research which begin to paint a picture of broader things to come.
In a recent NY Times/CBS News poll taken in August, 88% of respondents paid for traditional TV service and only 15% considered replacing their cable habit with Internet video services like Hulu, YouTube, Netflix and others. 80% of consumers claimed they still regularly watch live primetime TV. That same survey however also showed that 62% of consumers are time-shifting their primetime TV shows and the use of time-shifting technology increased by 61% in the past year. Nielsen confirmed that fact in their recent Three Screen Report showing that time-shifters grew to 94 million, an increase of over 18% from 2009. Yet, Pew Research also recently released a study indicating that only 42% of Americans consider their TV set to be a necessity. Last year that figure was 52%. Clearly attitudes are changing and we’re entering into an always connected, “on-demand” media world with consumers accessing content on more devices beyond their TV’s. People generally don’t want to plan around a network’s schedule. This will change the current dynamic and relationship that exists today between networks, distributors and consumers.
Americans have plenty of alternatives today to ditch the cable subscription. New devices, services, boxes and technologies are being launched this year that promise to be disruptive to the status quo. Internet Connected TV’s will become a bigger player and ultimately help drive the ability to drop cable and satellite services and force them to evolve rapidly. Consider this: Around 23% of current Internet users are already connecting their sets to the Internet and another 26% that aren’t are wanting to as soon as they can.
Consider these other predictions from eMarketer.
- 65% of the 220 million flat-panel TV’s sold in 2010 will be web-enabled and connected to the internet
- 98 million US broadband households will own web-enabled devices by 2014, for an estimated installed base of some 237 million devices. (In-Stat Research)
- 57 million broadband households will be watching full-length online video programming on their TV’s in 2014 (In-Stat Research)
Cable providers are vulnerable to fickle consumers already looking at alternatives to constantly increasing cable bills. And how many more fees and subscriptions can consumers take? Ask anyone what they think of their cable provider and expect a long and heated discussion from the majority of folks that would lead you to believe there’s certainly not a love-fest happening. People have already shown interest and the will to switch and ditch cable and satellite. Pent up anger towards providers illustrated in the NY Times article is a clear single that not all is well and once there are viable ways to access content online, many consumers will make the switch. eMarketer predicts that by 2011 nearly 40% of adult internet users will be watching full-length TV shows online.
Here Comes Amazon, Apple, and Google TV
Another indicator is simply the number of major players introducing services and devices to bring Internet content into your living rooms. Netflix has been streaming content for some time through a variety of devices including the Xbox. According to Netflix, more than 61% of current subscribers are streaming content. Recently Amazon announced that they’re planning on introducing a web-based subscription service for “catalogue” type content similar to Netflix. It will be viewable on a web browser or Internet connected devices or TV’s. The deal is subject to having enough providers sign on but already being a major retailer for DVD’s could ultimately give them an advantage to make digital-licensing deals.
Apple announced this week another version of its Apple TV box which is more of a cloud device. They’re offering cut-rate rentals via iTunes and may also be a factor given the penetration of iTunes in the market. Then there’s Google TV coming out this fall which promises to combine Google search with all the great content on the web and the content already on your TV and stream it in your living room. TV’s will come with the technology integrated and also as an add-on box. You can check out another post specifically on Google TV for more information on this upcoming service.
These recent developments are loud signals that major change is coming. Time will tell which ones stick and gain traction and which ones fall into 8-track heaven. One thing is crystal clear. Television as we know it is very likely going to mutate into a much richer, always on, open access pathway. The trick will be how we manage, leverage and take advantage of this new order.
