TiVO Q3 2016 Video Trends Report

VIDEO
TRENDS
REPORT
Q3 2016 Video Trends Report:
Consumer Behavior Across Pay-TV, VOD, PPV, OTT, TVE,
Connected Devices, and Content Discovery
Introduction
SURVEY
DEMOGRAPHICS
TiVo is a global leader in entertainment technology innovations and insights. TiVo’s combined portfolio, including
Digitalsmiths’ industry-leading content discovery products and services, will be marketed under the TiVo name
going forward.
TiVo enables pay-TV providers, digital publishers and consumer electronics (CE) manufacturers to power
personalized search, recommendations, carousels, social and sports discovery, and gain invaluable insights
• Q3 2016 Survey Size: 3,140
through analytics. TiVo’s customers include Charter Communications, DISH Network, DIRECTV, FOX Sports,
• Geographic Regions: United States,
Canada
Moviefone, Sharp Electronics, Sling TV, Sony PlayStationVue, The CW Network and Time Warner Cable.
• Age of Respondents: 18+ Years of Age
This survey was conducted in Q3 2016 by a
leading third-party survey service; TiVo analyzed
the results. TiVo conducts this survey on a
quarterly basis and publishes a report evaluating
and analyzing key trends across the pay-TV
industry. The purpose of this survey is to track
consumer trends over time, offering pay-TV
providers real, unbiased feedback regarding
consumer behaviors, industry perceptions, and
opinions of new technology hitting the market.
Each quarter, TiVo seeks real consumer opinions to uncover key trends relevant to pay-TV providers, digital
publishers and CE manufacturers. Consumers’ genuine, unbiased perspectives and feedback drive continuous
improvements to TiVo’s Seamless Discovery®, the industry’s leading personalized content discovery platform, and
Seamless Insight®, which delivers the reporting and analytics necessary to optimize content discovery. TiVo shares
these findings for the same reason it uses them—in hopes that video service providers leverage the information to
improve and develop applications and features that will enhance the overall TV viewing experience offered today.
This survey has been conducted every quarter since 2012, enabling the company to monitor, track and identify key
trends in consumers’ viewing habits, as well as their opinions of pay-TV providers, emerging technologies, connected
devices, TV Everywhere (TVE) apps and content discovery features, such as personalized recommendations.
In addition to key quarter-over-quarter (q/q) and
year-over-year (y/y) trends, TiVo’s Q3 2016 Video
Trends Report covers many new topics, including:
• A breakdown of content types viewed daily, as well
as respondent sentiment on whether there is ample
time to view all available content.
• A breakdown of the top channels respondents desire
in an à la carte pay-TV package, as well as their ideal
price for each channel.
• A detailed analysis of respondents who would like a
skinny bundle paired with a free streaming service
that features commercials—which could potentially
be the solution to churn.
PAY-TV PROVIDERS
Who is your current cable/satellite service provider?
BELL
DISH NETWORK
MEDIACOM
VERIZON VIDEOTRON
TELUS
ROGERS
COMCAST
SASKTEL
MTS
CABLEVISION COX
CHARTER
BRIGHT HOUSE NETWORKS
TIME WARNER CABLE
GOOGLETV
AT&T U-VERSE SHAW
DIRECTV
COGECO CABLE
2
SUDDENLINK
The State of Pay-TV
While the majority of this report examines how those with a pay-TV provider interact
with their TV offerings, TiVo first sought to understand the audience without a payTV provider. In Q3 2016, 82.4% of respondents have a pay-TV provider. However, of
respondents without a pay-TV provider, 17.9% cut cable/satellite service in the last 12
months. TiVo believes understanding why respondents cut cable/satellite service can
help with marketing efforts focused on subscriber acquisition. Therefore, new to the
Q3 2016 Video Trends Report is a question that asked what factors influenced a
respondent’s decision to cut cable. The top three factors were:
CUTTING PAY-TV SERVICE
Did you cut cable/satellite service in the last 12 months? (Only answered by respondents who do not
have a Pay-TV provider)
YES, I cut cable/satellite
service in the last 12 months
17.9%
NO, it has been longer than
12 months since I had cable/
satellite service
47.8%
• “Price – too expensive” – 82.9%
• “I use an internet streaming service, such as Netflix, Hulu, Amazon Video, etc.” 59.5%
• “I use an antenna to get the basic channels on my TV.” - 28.1%
While it may come as no surprise that price is the top factor, TiVo interprets the data to
mean that pay-TV providers should get creative with not only their packages, but also
their strategies for marketing these offerings. After identifying subscribers at risk for
cutting service, pay-TV providers must ensure that packages targeted to this group are
enticing, and strong enough to combat the option of using an antenna to receive TV.
Lastly, it’s no secret over-the-top (OTT) services are a major factor, but pay-TV providers
have the upper hand due to depth and breadth of content, such as sports, live events,
award shows, etc. It is imperative to emphasize key market strengths to these valuesensitive customers.
NO, I never had cable/
satellite service
34.3%
0
10%
30%
40%
50%
TOP FACTORS FOR CUTTING PAY-TV SERVICE
What factors influenced your decision to cut off your cable/satellite service? (Choose all that apply)
82.9%
Price – Too expensive
I use an internet streaming service, such as Netflix,
Hulu, Amazon Video, etc.
59.5%
28.1%
I use an antenna to get the basic channels on my TV
I like to binge watch an entire season of a TV series
through my streaming service
24.8%
Moved/Relocated, and I do not plan to sign-up for
cable/satellite service again
16.0%
The bulk of my TV viewing was the original series
on streaming services, such as “Orange is the New
Black” or “House of Cards”
14.0%
I share a friend/family member’s login to watch
shows on their cable/satellite provider’s app
3.0%
Moved in with a new roommate who already
subscribes to cable/satellite service
1.1%
N/A, it was not my decision to cut off cable/satellite
service, and I’m not sure why this decision was made
2.8%
0
3
20%
20%
40%
60%
80%
100%
The State of Pay-TV
POTENTIAL CHURN
In order to construct an accurate picture of the current state of pay-TV, TiVo
examines the topic of churn across several categories, including those who
recently switched pay-TV providers and those who have future plans to switch or
cut service altogether, as well as what factors could influence these audiences to
stay. Here is a breakdown of the current state of pay-TV as it relates to churn:
SWITCHED PROVIDERS
Have you switched cable/satellite providers in the last three months?
YES
9.1%
NO
90.9%
0
20%
• Of the respondents who have cable/satellite service, 9.1% answered they have
switched pay-TV providers in the past three months.
—— Unfortunately for pay-TV providers, this audience is up slightly q/q and y/y,
and Q3 2016 marks the highest this result has been since this question was
added to the survey in 2013.
• When asked if they plan to change pay-TV providers in the next six months,
respondents answered:
—— 5.6% plan to cut their pay-TV service.
—— 7.1% plan to change to another pay-TV provider.
40%
—— These figures total 44.9% of respondents—meaning just under half of
respondents could potentially leave their current pay-TV provider in the next
six months. While this is a large portion of the respondents, the positive news
for pay-TV providers is that this group of “at risk” respondents decreased
4.8% q/q.
100%
Do you plan to change cable/satellite providers in the next six months?
Q3 2016
Q2 2016
60%
55.1%
50%
50.3%
40%
-4.8% q/q
30%
29.7%
31.8%
20%
10%
5.6%
7.2%
7.1%
7.0%
2.5%
3.7%
0
YES, I am planning
to CUT cable/
satellite service
altogether
4
80%
PLANNING TO SWITCH PROVIDERS
—— 2.5% plan to switch to an online service or app.
—— 29.7% are on the fence, answering “maybe.”
60%
YES, I am planning
to CHANGE to
another cable/
satellite service
provider
YES, I am planning
to SWITCH to an
online app or rental
service
MAYBE
NO, I plan to stay
with my current
cable/satellite
provider
The State of Pay-TV
POTENTIAL CHURN CONT’D
To better understand those who plan to change, switch or cut pay-TV providers
in the next six months as well as determine what would keep this group from
churning, TiVo took the survey a step further by introducing a new question
to the Q3 2016 Video Trends Report. Respondents were asked to choose from
a list of several factors that would cause them to reconsider leaving their payTV provider. The clear winners, chosen by the bulk of respondents, are:
• Flexible Package Structure: “Choose and pay for only the channels I typically
watch.” - 65.0%
• More Integrated Video Solution: “Combine all of my TV providers (such as Netflix,
Hulu, Amazon Video) into one place so I can find something to watch, regardless of
the service.” - 43.5%
These two reasons mirror the factors—price and OTT service usage—discussed in the
previous section on why respondents actually cut their pay-TV service. To address
this, pay-TV providers should consider incorporating access to OTT offerings directly
through the set-top box (STB), rather than the viewer leaving to switch to a streaming
device. Providing an easier access point to OTT services not only satisfies the viewer,
but also increases the perceived value of pay-TV service.
5
PLANNING TO SWITCH PROVIDERS? IF YES...
Would you consider keeping your existing cable/satellite service provider if they allowed you
to do the following? (Choose all that apply)
Choose and pay for only the channels I
typically watch
65.0%
Combine all of my TV providers (such as Netflix,
Hulu, Amazon Video)into one place so I can find
something to watch, regardless of the service
43.5%
Make it easier to find something to watch on TV:
for example, recommend shows to you based on
your interests so it is easier to find something
you “want” to watch on TV
16.1%
Other
14.8%
0
20%
40%
60%
80%
The State of Pay-TV
RESPONDENTS’ SENTIMENTS TOWARD THEIR PAY-TV PROVIDERS
In Q3 2016, 79.0% of respondents are “very satisfied” or “satisfied” with their payTV service, an increase of 1.8% q/q, 3.0% y/y and 3.6% over two years. The “very
satisfied” category increased 3.1% q/q, 2.9% y/y and 3.5% over two years, which is
positive news for pay-TV providers. Still, understanding why respondents are dissatisfied
remains important.
Of those respondents who were dissatisfied, the top three reasons were:
• “Too expensive/Increasing fees for cable/satellite service” – 82.0%
• “Poor customer service” – 32.9%
• “Poor cable/satellite service” – 29.4%
Of note, the answer choice “Too expensive/Increasing fees for cable/satellite service”
increased 2.4% q/q, 13.6% y/y, 12.5% over two years.
VALUE
How would you rate the level of value you are receiving from your cable/satellite service provider?
IF UNSATISFIED...
Q3 2016
Q2 2016
Q3 2015
Q3 2014
Why do you feel you’re not getting enough value from your provider? (choose all that apply)
Q3 2016
54.9%
40%
54.9%
55.0%
50%
56.3%
60%
24.6%
24.0%
22.8%
21.0%
20.5%
21.1%
20.9%
24.0%
10%
Q3 2015
Q3 2014
“Too expensive/Increasing fees for cable/satellite service”
+2.4% q/q, +13.6% y/y, +12.5% over two years
30%
20%
Q2 2016
82.0%
Too expensive/
Increasing fees for
cable/satellite service
Poor customer
service
32.9%
0
Very Satisfied
79.0% are “Very Satisfied” or “Satisfied”
+1.8% q/q, +3.0% y/y, and +3.6% over two years
Satisfied
Unsatisfied
“Very Satisfied”
+3.1% q/q, +2.9% y/y, +3.5% over two years
Poor cable/
satellite service
29.4%
Bad channel
selection
28.7%
11.6%
Other
0
6
10%
20%
30%
40%
50%
60%
70%
80%
90%
The State of Pay-TV
PAY-TV SERVICE-LEVEL ADJUSTMENTS
BILL AMOUNT
How much is your monthly bill from your cable/satellite provider for TV services only? (Not including
video-on-demand/movie purchases, phone, or internet)
Since price has been noted already in this report as a pain point among respondents,
TiVo wanted to know how much respondents are paying, on average each month, for
pay-TV service. In Q3 2016, 34.9% of respondents indicated that they paid $101 or
more per month for cable/satellite services.
30%
25%
25.7%
20%
In Q3 2016, pay-TV service-level adjustments, both adding and cutting services, are
flat. Specifically, 17.3% of respondents selected “Increased/Added Services” and 17.5%
answered “Decreased/Removed Services.” Here is a breakdown of these results:
15%
34.9% pay over $100 per month
23.6%
15.8%
15.0%
10%
11.1%
8.8%
5%
0
Top Services Added: For the second quarter in a row, the top three services
added were:
Less than $50
$51 - $75
$76 - $100
$101 - $125
$126 - $150
$151+
• “Added new channels” – 47.4%
• “High Definition (HD)” – 25.4%
SERVICES ADDED
• “Premium Channels” – 22.9%
If increased, what service(s) did you add through your cable/satellite provider? (choose all that apply)
“Premium Channels” continues to struggle as an added service with decreases of 6.7%
q/q, 12.4% y/y, and 18.0% over two years. Also, Premium Channels were added at a
much lower rate (22.9%), than they were cut (41.2%). However, the category “Premium
Sports Package(s)” is up 4.0% q/q, and 3.6% y/y—an increase that most likely reflects
time of year, as many major sports kick off their seasons in Q3.
Q3 2016
Q2 2016
Q3 2014
47.4%
Added new channels
25.4%
High Definition (HD)
22.9%
Premium Channels
(e.g. HBO, Cinemax, etc.)
SERVICE ADJUSTMENT
Q3 2015
“Premium Channels”
-6.7% q/q, -12.4% y/y,
-18.0% over two years
20.3%
DVR
Have you adjusted your level of cable/satellite service in the last 12 months?
Increased/
Added Services
New/Upgraded equipment
(for example, DIRECTV Genie
or DISH Hopper)
9.1%
17.3%
15.4%
Premium Sports Package(s)
Decreased/
Removed Services
“Premium Sports Package(s)”
+4.0% q/q, +3.6% y/y
17.5%
12.7%
Other
Stayed the same
65.2%
0
7
16.7%
10%
20%
30%
40%
50%
60%
70%
0
10%
20%
30%
40%
50%
The State of Pay-TV
RESPONDENTS’ SENTIMENTS ON À LA CARTE
PAY-TV PACKAGES
Top Services Cut: For the sixth quarter in a row, the top three services cut were:
• “Reduced level of cable/satellite service” – 46.9%
• “Premium Channels (for example, HBO, Cinemax, etc.)” – 41.2%
• “Premium Sports Package(s)” – 17.0%
Note: “Cut cable/satellite service totally” is up 3.4% q/q.
Premium Channels: In Q3 2016, 40.0% of all respondents pay for premium channels,
which is down slightly q/q. The top three channels are HBO (24.0%), Showtime (15.1%)
and The Movie Channel/Network (13.1%). Growth and/or decline in adoption of
premium channels was relatively flat for all channels listed, so there’s no notable news to
report for this category.
In Q3 2016, 78.0% of respondents would like to pay for only the channels they watch—
and this response is up 1.2% q/q and 1.3% y/y. The top five most desired channels among
all respondents were: ABC, CBS, Discovery Channel, NBC and History. On average,
respondents chose 18 channels to compose their ideal line-up.
Additionally, the average price respondents want to pay for self-selected channels is
$29.46 per month, or $1.84 per channel, per month. See pages 9-11 for more on
à la carte pay-TV packages.
SERVICES CUT
PREMIUM CHANNELS
If decreased, what service(s) provided through your cable/satellite provider did you cut? (choose all
that apply)
Do you pay for any of the following premium channels through your cable/satellite provider? (choose
all that apply)
Q3 2016
Q2 2016
60%
46.9%
Reduced level of cable/satellite service
41.2%
Premium Channels (for example, HBO,
Cinemax, etc.)
12.2%
Returned cable/satellite box(es)
24.0%
15.1%
10%
9.1%
DVR
New/Upgraded equipment (for example,
DIRECTV Genie or DISH Hopper)
0
5.5%
6.2%
Other
0
8
40.0% pay for premium channels
30%
20%
“Cut cable/satellite service totally”
+3.4% q/q
10.4%
Cut cable/satellite service totally
50%
40%
50%
17.0%
Premium Sports Package(s)
60.0%
10%
20%
30%
40%
50%
HBO
Showtime
13.1%
The Movie
Channel/
Network
12.9%
Sports
Package(s)
11.1%
10.0%
Starz
Cinemax
2.8%
No, I do
not pay for
access to any
premium
channels
Other
Analytical Commentary
ANALYSIS OF DESIRED CHANNELS IN AN
À LA CARTE PAY-TV PACKAGE BY COUNTRY
New to the Q3 2016 Video Trends Report is a question format in which
respondents selected their ideal channels and were then asked how much they
would pay for each one—this format allowed TiVo to measure respondents’
perceived value of networks offered to them by both popularity and desired
price. View the complete breakdown of channels and cost on pages 10-11.
This insight provides valuable information to pay-TV providers. For instance,
if a provider is offering a 10-channel package, what are the most desired
channels, and what price do consumers want to pay? Because the report
surveys respondents in both the United States and Canada, much of the
video content is the same in both countries, but some Canadian content is
unavailable in the U.S. Therefore, information is displayed by country.
In the U.S., respondents’ average price for the top 10 channels would be
$15.30; for 20 channels, it would be $32.92. In Canada, respondents’ average
price for the top 10 channels would be $16.38; for 20 channels, it would
be $32.00. See the charts on pages 10 -11 for a breakdown of the most
desired channels by country, as well as by top 10 and top 20 channels.
Several networks now offer a direct-to-consumer app. For example, CBS
launched CBS All Access, which allows subscribers to watch live content, catchup content and bonus content. CBS All Access costs $5.99 a month, or $9.99
a month for a commercial-free option. The service also offers a one-week
free trial, and subscribers can easily cancel because there is no contract.
So, if a consumer values the 20-channel package at, on average, $1.65 per channel,
will he or she experience sticker shock paying $5.99 per channel while attempting to
bypass the pay-TV provider through an app? And, will the consumer be willing to add
10 to 20 apps to his or her preferred streaming device and pay a monthly fee for each?
Across the industry, TiVo examined the skinny bundle offerings currently
available and learned that none of the current offerings include all top 20
channels. If consumers attempted to build this package themselves, Sling TV’s
“All Channels” package costs $40.00 and HBO is $14.95. Together, they total
9
$54.95, plus, an over-the-air antenna would still need to be purchased to
view ABC, NBC and CBS. PlayStation Vue had a similar lack of coverage.
The video industry knows that consumers are willing to pay roughly $80 per month
for TV service. Skinny bundles give consumers a larger percentage of content they
desire for a lower price, but add up the cost of a skinny bundle, subscription video
on-demand (SVOD) service and a streaming device like Google Chromecast—and the
total is essentially back to the cost of a traditional pay-TV package. Thus, the question
remains: will consumers catch on that skinny bundles aren’t really skinny? Though
a true à la carte offering is unavailable today, consumers still have multiple ways to
consume content, and at the end of the day, these options benefit consumers.
Will asking consumers to pay the same price for less video content be the
future of television? TiVo believes a huge opportunity remains for an enticing
offering that delivers great value to consumers, and is economical for providers
as well. Though TiVo believes the dollar amounts for each channel listed on
pages 10-11 are accurate, it only captures what respondents claim they will
pay, not what they might pay if extra value were present. In an effort to fight
churn within the existing subscriber base as well as competition from emerging
services, pay-TV providers must offer compelling à la carte, or skinny bundle,
packages that include key channels unavailable in competitive offerings.
INTEREST IN AN À LA CARTE PAY-TV PACKAGE
When purchasing cable/satellite service you often choose from pre-set channel packages. Would
you like the ability to make your own package by selecting ONLY the channels you WANT to watch?
22.0%
YES, I would like
to choose only
the channels I
want to watch.
Q3 2016
78.0%
NO,I am not
interested in
this capability.
Analytical Commentary
ANALYSIS OF DESIRED CHANNELS IN AN
À LA CARTE PAY-TV PACKAGE BY COUNTRY
IDEAL CHANNELS IN AN À LA CARTE PAY-TV PACKAGE - U.S.
If YES, which channels would you be interested in including in your TV package? (choose all that apply)
80%
70%
60%
50%
40%
30%
Top 10 Channels
Among U.S.
Respondents
ABC
CBS
NBC
Discovery Channel
History
FOX
A&E
PBS
TNT
TBS
Popularity
Among U.S.
Respondents
70.7%
70.1%
65.5%
62.1%
59.7%
56.0%
50.8%
49.3%
49.1%
48.2%
Total
Price Per
Channel
$1.52
$1.55
$1.54
$1.53
$1.54
$1.47
$1.49
$1.74
$1.51
$1.41
$15.30
Top 20 Channels
Among U.S.
Respondents
ABC
CBS
NBC
Discovery Channel
History
FOX
Popularity
Among U.S.
Respondents
70.7%
70.1%
65.5%
62.1%
59.7%
56.0%
Price Per
Channel
A&E
PBS
TNT
TBS
USA Network
FX
National Geographic
HBO
AMC
ESPN
Food Network
Comedy Central
The Weather Channel
HGTV
50.8%
49.3%
49.1%
48.2%
47.7%
47.2%
46.1%
45.2%
44.0%
44.0%
43.9%
43.8%
42.4%
42.0%
Total
$1.49
$1.74
$1.51
$1.41
$1.46
$1.59
$1.57
$3.13
$1.64
$1.95
$1.60
$1.62
$1.36
$1.70
$32.92
$1.52
$1.55
$1.54
$1.53
$1.54
$1.47
20%
10
CBC (Canadian Broadcasting Company)
Telemundo
Comedy Network
CBC News
0
ABC
CBS
NBC
Discovery Channel
History
FOX
A&E
PBS
TNT
TBS
USA Network
FX
National Geographic
HBO
AMC
ESPN
Food Network
Comedy Central
The Weather Channel
HGTV
CNN
Animal Planet
TLC
Syfy
Lifetime
Showtime
Hallmark Channel
MSNBC
FOX Sports
Travel Channel
TCM
Disney
NFL Network
NBC Sports
ABC Family (renamed Freeform)
Spike
TV Land
Cartoon Network
Bravo
FOX News Channel
CW
Nickelodeon
E!
TruTV
MTV
ION
Oxygen
WGN America
VH1
Adult Swim
Music Choice
IFC
Disney Jr.
OWN (Oprah Winfrey Network)
Nick Jr.
MLB Network
CMT (Country Music Television)
WE TV
Encore
FOX Business
Reelz
Golf Channel
BET
Fuse
TeenNick
HSN
Sprout
Sportsman Channel
Esquire
FYI
QVC
Fusion
Velocity
Ovation TV
Tennis Channel
Univision
10%
Analytical Commentary
ANALYSIS OF DESIRED CHANNELS IN AN
À LA CARTE PAY-TV PACKAGE BY COUNTRY
IDEAL CHANNELS IN AN À LA CARTE PAY-TV PACKAGE - CANADA
If YES, which channels would you be interested in including in your TV package? (choose all that apply)
50%
Top 10 Channels Among
Canadians
Popularity
Among
Canadians
HBO
44.8%
A&E
43.9%
Discovery Channel
42.1%
CTV
40.1%
CBC
39.8%
History
39.3%
ABC
38.4%
Global Television Network 36.4%
FOX
35.8%
CityTV
35.0%
Total
40%
30%
20%
Price Per
Channel
Top 20 Channels Among
Canadians
$2.59
$1.68
$1.79
$1.42
$1.42
$1.69
$1.53
$1.47
$1.44
$1.35
$16.38
HBO
A&E
Discovery Channel
CTV
CBC
History
ABC
Global Television Network
FOX
City TV
Food Network
CBC News
CBS
NBC
The Weather Channel
Showtime
National Geographic
TLC
AMC
HGTV
Popularity
Among
Canadians
44.8%
43.9%
42.1%
40.1%
39.8%
39.3%
Price Per
Channel
38.4%
36.4%
35.8%
35.0%
34.9%
33.8%
32.3%
32.1%
30.1%
29.8%
29.8%
29.4%
29.3%
29.3%
Total
$1.53
$1.47
$1.44
$1.35
$1.61
$1.45
$1.41
$1.37
$1.35
$1.78
$1.79
$1.52
$1.82
$1.50
$32.00
$2.59
$1.68
$1.79
$1.42
$1.42
$1.69
11
HBO
A&E
Discovery Channel
CTV
0
CBC (Canadian Broadcasting Company)
History
ABC
Global Television Network
FOX
City TV
Food Network
CBC News
CBS
NBC
The Weather Channel
Showtime
National Geographic
TLC
AMC
HGTV
Bravo
Space
Animal Planet
Sportsnet
TSN
Comedy Central
Comedy Network
CNN
CTV News
PBS
Spike
Cartoon Network
ESPN
Disney
The W Network
FX
MTV
YTV
Nickelodeon
Lifetime
TBS
CP 24
NBC Sports
OWN (Oprah Winfrey Network)
E!
Treehouse
Disney Jr.
TNT
Syfy
The CW
FOX Sports
Travel Channel
CMT
NFL Network
Music Choice (Music Channels)
ABC Family (renamed Freeform)
Hallmark
TCM
Adult Swim
TV Land
USA Network
MSNBC
IFC
Nick Jr.
Golf Channel
WGN America
FOX News
MLB Network
Encore
VH1
BET
Sportsman Channel
Tennis Channel
Teen Nick
FOX Business
Oxygen
FYI
Velocity
Fusion
HSN
Fuse
ION
TruTV
Reelz
Esquire
Telemundo
Univision
OvationTV
WE TV
Sprout
QVC
10%
TV Viewing Habits
On average, how much of your daily TV viewing time is spent watching the following types of TV?
(provide an answer to all 3 categories listed below)
Live TV accessed from
your channel guide.
30%
38.9%
• 61.1% watch OTT/SVOD content.
85.7% watch
live TV daily
0
Less than
30 min.
30 min. 1 hour
1-2 hours
2-3 hours
3-4 hours
4-5 hours
14.3%
3.8%
6.6%
2.7%
4.6%
2.5%
2.0%
15.7%
13.1%
9.6%
5%
12.0%
12.8%
10%
17.3%
15%
14.8%
11.2%
22.0%
20%
8.8%
5.8%
4.0%
TiVo will continue to collect and monitor the data, but with 28.3% of respondents
running out of time, content discovery becomes even more crucial in improving the
overall pay-TV experience. Plus, content discovery functionality saves consumers’ time,
only showing them programs they want to watch, due to personalization based on
previous viewing habits.
61.1% watch OTT/
SVOD content daily
25%
• Only 45.2% of respondents feel they have enough time to watch their shows.
• 28.3% typically run out of time.
69.5% watch recorded/
DVR’d TV daily
30.5%
35%
• Another 26.5% only have time if they record/DVR shows and then skip commercials.
OTT/streaming shows from
services such as Netflix,
Hulu, Amazon Video, etc.
40%
• 69.5% watch previously recorded/DVR’d TV.
In addition to the type of content viewed, TiVo was interested in understanding whether
respondents feel they have “too much” to watch, or are pleased with their ability to fit
in all of their favorite shows on a weekly basis. In order to track this, TiVo added a new
question, which produced the following results:
Previously recorded/DVR’d
TV shows/movies.
22.5%
• 85.7% watch live TV from their channel guide.
TV VIEWING TIME
12.8%
11.6%
While the bulk of the survey aims to understand respondent sentiment toward pay-TV
providers, as well as identify emerging features and services, tracking high-level, overall
TV viewing behaviors is also important. Therefore, this quarter, the question format
changed to focus more on types of content viewed, as well as daily content consumption.
According to the Q3 2016 survey results, respondents’ TV viewing behavior, per day, is
as follows (see chart to the right for a breakdown of daily content viewing):
5+ hours
I don’t
watch this
on a regular
basis
TIME FOR FAVORITE TV SHOWS
On average each week, do you feel you have enough time to watch all your favorite TV shows?
YES, I find time each week to watch all the
shows I want to watch.
28.3%
Q3 2016
26.5%
12
45.2%
YES, but only if I DVR them so I can skip
the commercials.
NO, I typically run out of time on a weekly basis
and do not get to watch all my favorite shows.
TV Viewing Habits
In addition to finding time to watch TV shows/movies through cable/satellite, it’s
important to understand how respondents feel about their service. TiVo’s survey
not only tracks engagement with channels watched, but also respondent sentiment
toward the pay-TV experience. Here is a breakdown of results for Q3 2016:
OVERWHELMED BY CHANNELS
Do you feel overwhelmed by the number of channels available to you, and listed in your guide?
Q3 2016
70%
• 34.4% of respondents feel overwhelmed by the number of channels available to
them, an increase of 2.1% q/q.
60%
• The bulk of respondents (79.2%) watch 10 channels or less.
40%
—— The good news for pay-TV providers is that respondents are watching more
channels than previously since 11 to 20+ channels saw increases of 3.9% q/q
and 3.3% y/y.
• 58.3% of respondents are happy with their ability to find something to watch within
their cable/satellite service.
—— However, positive feelings toward finding something to watch remain
relatively flat q/q and y/y. In order to retain subscribers over time and
improve perceived value of the service as a whole, this critical metric needs to
experience positive growth.
• Over half (55.8%) of respondents would like their channel guide to categorize
content into groups/lists of TV shows/movies—or display what TiVo refers
to as carousels.
50%
30%
34.4%
10%
0
YES, I feel overwhelmed
YES, I would like my guide to be changed.
YES, but I would like access to both types of
guides (channel guide like I have today AND
groups/categories of shows).
Q3 2016
44.2%
36.9%
NO, I don’t feel overwhelmed
NUMBER OF CHANNELS WATCHED
Of the channels offered to you, how many channels do you typically watch, on average?
10 or fewer channels
11-20+ channels
90%
80%
70%
83.1%
79.2%
82.5%
11-20+
channels
+3.9% q/q,
+3.3% y/y
40%
30%
20%
20.8%
10%
18.9%
32.3%
20%
50%
Would you like your channel guide to be changed, so that it’s sorted or categorized into groups/lists
of TV shows or movies? For example, “What is on Now”, “Because You Watched This,” “Live Sports
On Now.”?
67.7%
65.6%
“Yes”
+2.1% q/q
60%
CHANNEL GUIDE OR CAROUSELS
Q2 2016
17.5%
16.9%
0
Q3 2016
Q2 2016
Q3 2015
EASY TO DISCOVER CONTENT
Do you feel it is easy to find something you “want” to watch on TV?
NO, I am not interested in my guide changing.
YES
58.3%
0
13
10%
20%
30%
40%
50%
60%
Revenue-Generating Pay-TV Content
PAID VIDEO-ON-DEMAND (PVOD) OFFERINGS
PVOD PURCHASES PER MONTH
In Q3 2016, 42.2% of respondents make one or more PVOD purchases from
their pay-TV provider, and of this group, 30.1% do so on a monthly basis.
Overall PVOD purchases increased 13.0% y/y, 14.7% over two years and 15.1%
over three years. What is driving this growth? TiVo believes one fundamental
factor in this growth is more enticing user interfaces (UIs) which incorporate
recommendations, and a better content discovery experience overall.
60%
On average, how many video-on-demand (movies offered through your provider) purchases does
your household make each month? (Movies purchased from on-demand stations provided by your cable/
satellite provider. Does NOT include Netflix, Redbox, iTunes, etc.)
57.8%
50%
40%
With that said, it’s important to measure how respondents feel about the
experience of navigating their pay-TV providers’ PVOD catalog. In Q3 2016, 63.9%
of respondents who purchase PVOD feel it is easy to find a movie to watch.
30%
+13.0% y/y, +14.7% over two years, +15.1% over three years
20%
19.8%
PVOD CATALOG DISCOVERY
Do you feel it’s easy to find a movie you will enjoy in the video-on-demand catalog provided by your
cable/satellite provider? (accessed from your guide)
10%
12.1%
6.3%
0
YES
0
14
0 rentals
63.9%
10%
20%
30%
40%
50%
60%
70%
80%
1-2 rentals
3-4 rentals
4.0%
5+ rentals
<1 rental
per month
Over-the-Top Trends and Cord-Cheating
Cord-cheating, a trend TiVo began tracking in Q2 2013, refers to cable/satellite
subscribers who seek on-demand video content from third-party and OTT services
in addition to pay-TV providers’ offerings. Cord-cheating spans a variety of delivery
models, including streaming SVOD, such as Netflix and Hulu, as well as transactional
video-on-demand (TVOD), such as Redbox kiosks and iTunes.
In Q3 2016, 66.8% of respondents with pay-TV service fall into the category that TiVo
coined as “cord-cheaters.” Specifically, of respondents who are cord-cheaters:
• 90.7% use a SVOD service.
• 53.2% use a TVOD service.
• 44.0% use both SVOD and TVOD services.
Below is a chart that illustrates a breakdown of the adoption of SVOD services by all
respondents. Additional adoption and market share trends continue on pages 16-17.
MONTHLY SUBSCRIPTION OTT/SVOD SERVICES
Do you use any of these monthly subscription services for movies or TV shows? (choose all that apply)
61.9% Use SVOD Services: +5.6% y/y, +9.2% over two years, +13.7% over three years
5.2% 3.1% 2.7% 2.1% 1.7% 1.6% 1.0%
1.8%
Netflix
Amazon Prime Video (free movies)
Q3 2016
51.8%
24.8%
9.9%
38.1%
Hulu
HBO NOW (a different service from HBO Go)
YouTube Red
5.6% 3.0% 3.7% 1.7% 1.5% 1.4% 0.7%
2.3%
Shomi
CBS All Access
Q2 2016
53.7%
24.0%
11.8%
36.1%
Sling TV
PlayStation Vue
Blockbuster
4.3% 2.1% 1.0% 1.3% 1.0%
1.7%
I do not use any of these services
Other
Q3 2015
49.0%
19.9%
12.1%
43.7%
1.2%
Q3 2014
46.4%
17.9%
1.4%
9.6%
47.3%
1.8%
Q3 2013
15
41.7%
12.9%
9.4%
1.5%
51.8%
Over-the-Top Trends and Cord-Cheating
• 92.3% of respondents who have an SVOD account watch it on a daily basis.
—— The bulk of those (59.2%) do so for two hours or less per day.
• 81.0% of respondents are pleased with their ability to find something to watch on
SVOD services, which is up slightly y/y.
30.1%
16
11.1%
10.1%
6.8%
15.8%
8.1%
10.0%
10.7%
21.7%
$6 - $8
$9 - $11
$12 - $14
$15 - $20
I do not pay for
these services
because I have
access
through
$21 - $30+
another
person’s
account
VIEW TIME FOR SVOD
SVOD CONTENT DISCOVERY
On average per day, how many hours do you
watch content on these subscription services?
Do you feel it is easy to find something
you “want” to watch on these
subscription services?
35%
30%
19.0%
25%
20%
YES
15%
10%
5%
Never
Rarely
3-4 hours
2-3 hours
1-2 hours
<1 hour
Q3 2016
81.0%
0
1 Frankel, Daniel. “Rogers and Shaw Shutter Canadian SVOD Start-up Shomi.” FierceCable. N.p., 27 Sept. 2016.
Web. <http://www.fiercecable.com/cable/rogers-and-shaw-shutter-canadian-svod-start-up-shame>.
14.0%
33.4%
16.5%
2.3%
$3 - $5
1.1%
State of Engagement With SVOD Services:
$1 - $2
6.6%
One other note, Shomi, a Canadian SVOD service, recently announced it will shut
down just two years after its launch.1 In the Q3 2016 survey, conducted before this
announcement, 2.7% of respondents subscribe to Shomi. TiVo will continue to monitor
SVOD services to identify the percentage of market share necessary to stay in business.
$15-$30+:
+5.7% over two years
0
4.3%
—— For the second quarter in a row, 10.0% of respondents say they share an
SVOD account and do not pay to do so.
5%
5+ hours
—— Respondents are spending more than they were previously since $15-$30+
increased slightly y/y and 5.7% over two years—this could be partially related
to Netflix’s recent price increases.
10%
4.0%
• 56.6% spend between $6 and $14 a month on SVOD services.
15%
4-5 hours
—— CBS All Access, PlayStation Vue, and Sling TV were relatively flat q/q and y/y.
20%
3.2%
—— Netflix was down 1.9% q/q, but saw positive growth of 2.8% y/y.
25%
8.9%
—— Hulu saw negative growth of 1.9% q/q and 2.2% y/y.
30%
15.9%
—— Amazon Prime Video was up slightly q/q and 4.9% y/y.
Q3 2014
35%
2.6%
• The top three SVOD services used are Netflix, Amazon Prime Video and Hulu. Below
are a few q/q and y/y growth numbers to note for SVOD services:
Q3 2016
34.3%
—— SVOD growth was down 2.0% q/q, but over time, it’s been trending up with
increases of 5.6% y/y, 9.2% over two years and 13.7% over three years.
How much do you spend each month on subscription services (combined spend on Netflix, Hulu, etc)?
3.6%
• In Q3 2016, 61.9% of respondents use a monthly SVOD service.
SVOD BILL AMOUNT
24.9%
State of Adoption and Market Share of SVOD Services:
NO
Over-the-Top Trends and Cord-Cheating
It’s important to compare the large number of respondents (81.0%) who are happy with
their ability to find something to watch on SVOD services to respondent satisfaction
(58.3%) with finding something to watch on pay-TV services, or on pay-TV providers’
PVOD offerings (63.9%). Why is Netflix, the market leader, so appealing to respondents?
Similar to Q2 2016 results, the top three most appealing Netflix features are:
• “Price (the cost of Netflix plays a key role in why I use the service)” – 56.6%
• “All members of your household can create their own profile” – 52.0%
NETFLIX’S APPEALING FEATURES
If you are a Netflix subscriber, which of the below features of Netflix’s service do you find appealing?
(choose all that apply)
Q3 2016
Q2 2016
PRICE
The cost of Netflix plays a key role
in why I use the service
56.6%
• “Search (the ability to search for a piece of content to watch)” – 51.2%
The fact that “search” was among the top three reasons why Netflix is appealing—and
selection of this answer has increased 2.2% q/q—indicates respondents care about
quickly and easily finding something to watch. Later in the survey, reasons for not using
search functionality will be discussed. Pay-TV providers should note these reasons, and
strive to innovate and compete with emerging video offerings.
CUSTOM PROFILES
All members of your household
can create their own
52.0%
SEARCH
The ability to search for a
piece of content to watch
51.2%
49.0%
AUTO-PLAY TO
THE NEXT EPISODE
Next show comes on
automatically
47.7%
RECOMMENDATIONS
Shows to watch that are
personalized to you based on
what you have previously watched
40.1%
PRE-MADE LISTS OF SHOWS
Such as “Because You Watched,”
“Kids Movies,” etc
31.3%
I have a Netflix account,
but do not find any of
these features valuable
3.8%
I do not have a
Netflix account
11.8%
0
17
+2.2% q/q
10%
20%
30%
40%
50%
60%
Over-the-Top Trends and Cord-Cheating
Additionally, price increases for Netflix and related services have been featured in
the news frequently. In order to better understand this, TiVo began monitoring how
respondents feel about the cost of Netflix, as well as what is the highest price at which
they value this service. In Q3 2016, for the second quarter in a row, the largest group
(39.4%) selected the $12 to $15 range as the most they would pay for Netflix service.
Same as last quarter, the second largest group (30.4%) will not pay any more than they
currently do.
It’s no secret that the video industry is evolving, with new services emerging and existing
services continuously innovating and marketing new packages, price structures and
offerings. Therefore, TiVo wanted to engage with respondents to determine how far
these services could go to gain adoption. New to TiVo’s Q3 2016 Video Trends Report
is a question that asks: If Netflix or Hulu offered a free TV service requiring viewers
to watch commercials, would the respondent consider using it? Sixty-nine percent of
respondents answered yes, with the bulk of respondents (83.3%) willing to watch one
to four commercials in a 30-minute period. Of those uninterested in a free service with
commercials, it is interesting to note that 14.3% are open to commercials if content is
personalized to their interests and/or viewing preferences.
TiVo’s data supports Hulu’s decision to sunset its free version, which relied on
commercial revenue. Because the vast majority of respondents are only willing to view
one to four commercials, it would be very difficult for a SVOD to be successful with this
limited number of revenue-driving commercials.
FREE SERVICE
If Netflix or Hulu offered a FREE TV service, but you were required to watch commercials, would
you consider using it?
30.6%
YES, I will watch
commercials if
the service is free
If Netflix were to increase the monthly price for its service, what is the most you would pay each
month for your Netflix account?
69.4%
IF YES...
IF NO...
How many commercials per 30
minutes would you tolerate?
Would you tolerate commercials if they
were personalized to you based on your
interests and/or viewing preferences? 1
commercial
2
commercials
12.6%
80%
26.3%
40%
4
commercials
12.6%
20%
39.4%
10.6%
1.2%
1.4%
2.5%
10%
5.6%
5
commercials
8.9%
30.4%
30%
0
$0
I will not
pay more
18
85.7%
31.8%
40%
20%
100%
60%
3
commercials
THE COST OF NETFLIX
NO, I will not use it
because I don’t want
to watch commercials
Q3 2016
N/A
$12 - $15
$16 - $19
$20- $23
$24 - $27
$28 - $31
$32+
I do not have
a Netflix
Account
6-10
commercials
14.3%
7.2%
0
9.5%
0 10% 20% 30% 40%
YES, I would
tolerate
commercials if
they were more
relevant to me
NO, I am not
interested in
commercials
on streaming
services
Over-the-Top Trends and Cord-Cheating
TVOD SERVICES
MONTHLY SPEND ON TVOD SERVICES
• 70.3% of respondents using TVOD services watch content on a weekly basis, which
decreased 3.6% q/q (see chart on page 20).
—— The bulk of this group (54.1%) watch five hours or less.
$1 - $2
$3 - $5
$6 - $8
$9- $11
$15 - $30
$30+
I use these
services
occasionally,
but not on a
monthly basis
TVOD SERVICES
Do you rent, or purchase movies from services like Amazon, CinemaNow, iTunes, Redbox kiosks, Vudu, etc.? (choose all that apply)
36.3% use TVOD services
2.3% 2.2% 1.6% 1.2%
Q3 2016
17.1%
12.8%
8.4%
5.6%
2.2%
Amazon Video
63.7%
Redbox Kiosks (at stores)
iTunes
2.5% 2.1% 1.3% 0.9%
Q2 2016
16.3%
15.0%
8.3%
5.6%
1.9%
Google Play
YouTube Movies (paid movies)
Vudu
63.6%
CinemaNow
Flixster
2.3% 1.6% 0.8% 1.0%
Q3 2015
19
15.4%
15.8%
7.7%
4.7%
1.5%
63.9%
27.8%
0.5%
10.6%
9.0%
6.6%
$12 - $14
0.7%
0
5.4%
5%
8.7%
10%
8.9%
15%
12.9%
20%
28.2%
47.8% spend $1-$8 per month:
+2.0% y/y
11.7%
• 47.8% of respondents spend $1 to $8 per month renting from TVOD services, an
increase of 2.0% y/y.
25%
19.4%
—— Redbox Kiosks was the only service to experience notable declines, with
usage down 2.2% q/q and 3.0% y/y.
30%
Q3 2015
22.3%
• The top three TVOD services used are Amazon Video, Redbox kiosks (at stores),
and iTunes.
Q3 2016
13.5%
• 36.3% of all respondents use pay-per-rental or third-party TVOD services, but
growth is flat for these services both q/q and y/y.
How much do you spend per month renting movies from these pay-per-rental services?
13.8%
Below is a breakdown of the state of adoption, market share trends and overall
engagement with TVOD services. In Q3 2016:
I do not use these services
Other (please specify)
Over-the-Top Trends and Cord-Cheating
The Enticement to Cord-Cheaters and Cord-Cutters
WHY USE OTT SERVICES
Why are both categories, SVOD and TVOD, so appealing to consumers? For the second
quarter in a row, the top five reasons for using these services are:
• “Convenience” – 52.9%
Why do you use these third-party rental and/or monthly subscription services like Amazon, iTunes,
Netflix, Vudu, CinemaNow, Blockbuster, Redbox, YouTube? (choose all that apply)
CONVENIENCE
52.9%
• “It’s cheaper” – 43.0%
• “No commercials or ads” – 42.9%
IT’S CHEAPER
43.0%
• “Ability to watch certain TV shows and whole seasons (or binge viewing)” – 39.0%
• “Better selection” – 31.4%
NO COMMERCIALS
OR ADS
42.9%
Ability to watch
CERTAIN TV SHOWS &
ENTIRE SEASONS
VIEW TIME FOR TVOD SERVICES
BETTER SELECTION
On average per week, how many hours do you watch content on these pay-per-rental services?
Q3 2016
Q2 2016
35.7%
32.3%
Rarely
Less than
1hr.
1-5
hours
5-10
hours
10-15
hours
15-20
hours
20+
hours
5.3%
0
6.1%
2.5%
3.0%
2.4%
1.9%
3.3%
3.3%
2.0%
5%
23.8%
Ability to watch
TV/MOVIES ON
YOUR IPAD/TABLET
8.0%
10%
26.7%
I ENJOY THE
ORIGINAL CONTENT
offered by these services
23.0%
21.8%
15%
20.8%
20%
23.6%
25%
30.0%
EASIER TO FIND
what you’re looking for
35%
30%
31.4%
Ability to watch
TV/MOVIES ON
YOUR COMPUTER
70.3% watch content on a weekly basis: -3.6% q/q
40%
39.0%
Never
22.3%
Ability to watch
TV/MOVIES ON
YOUR SMARTPHONE
18.1%
I rent from these
services because
I DO NOT HAVE CABLE/
SATELLITE SERVICE
10.6%
0
20
10%
20%
30%
40%
50%
60%
Analytical Commentary
À LA CARTE AND FREE OTT - IS IT THE FUTURE OF PAY-TV?
After a deeper analysis of the Q3 2016 survey results, TiVo’s Data Science
Team discovered a strong correlation between those who want an à la carte
pay-TV offering, and those who would like a free OTT streaming service (with
commercials) such as those offered by Netflix or Hulu. While it was apparent
that a large population (78.0%) of respondents desire à la carte pay-TV, what
the Data Science Team found striking was that of those respondents who
want à la carte, 75.8% would also use a free OTT streaming service.
TiVo believes this relationship between à la carte and free OTT is interesting. While
the industry has talked at length about how cutting pay-TV service in order to bundle
various video services can often cost more than a pay-TV package, TiVo’s survey reveals
that this may actually be what consumers want. Is the winning combination an à la carte
package of about 18 channels for $29.46/per month, plus a free OTT streaming service?
Connected Devices
TABLET & SMARTPHONE OWNERS
With the incredible growth of mobile viewing devices (tablets, laptops, phones),
households have essentially added multiple TVs to their homes, an opportunity which
pay-TV providers, content owners and CE manufacturers can capitalize on. TiVo believes
improvements could be made in personalization of recommendations and advertising.
More so than any other device, mobile phones tend to be personalized and used by only
one person. In addition, the type of content consumed on a mobile device tends to be
different than the type of content that same viewer watches from a set-top box.
Do you own an iPad/tablet or a Smartphone? (choose all that apply)
Q3 2016
Q2 2016
Q3 2015
Q3 2014
+2.6% y/y, +4.5% over two years,
+11.5% over three years
55.1%
54.1%
52.5%
YES, I own an
iPad/Tablet
50.6%
Therefore, it’s important to keep track of the size of the connected device audience as a
whole to know the potential reach of these efforts.
43.6%
TABLETS AND SMARTPHONES
73.7%
In Q3 2016, 86.1% of respondents own an iPad/tablet and/or a smartphone. A further
breakdown shows:
• 55.1% own an iPad/tablet, a slight increase q/q, 2.6% y/y, 4.5% over two years and
11.5% over three years.
• 73.7% own a smartphone, which decreased q/q, but the data shows a more positive
outlook long-term with increases of 4.4% y/y, 8.6% over two years and 11.0%
over three years.
21
Q3 2013
-2.7 q/q,+4.4% y/y,
+8.6% over two years,
+11.0% over
three years
76.4%
69.3%
YES, I own a
Smartphone
65.1%
62.7%
0
10%
20%
30%
40%
50%
60%
70%
80%
Connected Devices
TV-ORIENTED DEVICES
In Q3 2016, 63.3% of respondents own a Wi-Fi enabled device—a 2.8% increase y/y. For the sixth quarter in a row, the top devices owned are:
• “Computer/laptop” – 37.1%
• “Smart TV” – 18.7% (increased 4.8% y/y)
• “Wi-Fi-enabled Blu-ray Player” – 11.9% (increased slightly y/y)
• “Apple TV” – 10.8% (increased slightly q/q and 2.2% y/y)
• “Google Chromecast” – 9.1% (increased 1.3% y/y)
While the Amazon Fire TV Stick did not appear in the five top devices owned, it did experience positive growth of 2.5% y/y.
TV-ORIENTED DEVICES
Do you have any of the following connected devices (Wi-Fi enabled devices)(this question excludes gaming devices, smartphones and tablets)? (choose all that apply)
63.3% own a Wi-Fi enabled device: +2.8 y/y
Smart TV: +4.8% y/y; Apple TV: +2.2% y/y;
Google Chromecast : +1.3% y/y; Amazon Fire TV Stick: +2.5% y/y
Computer/Laptop
Smart TV
5.5% 3.6% 1.8% 1.2%
Q3 2016
1.7%
Wi-Fi-enabled Blu-ray Player
Apple TV
Google Chromecast
37.1%
18.7%
11.9%
10.8%
9.1% 7.2%
36.7%
Roku Streaming Player
Amazon Fire TV Stick
3.0% 2.2% 1.6% 1.2%
Q3 2015
1.8%
Roku Streaming Stick
TiVo Bolt/TiVo Roamio/TiVo Roamio Plus/TiVo Roamio OTA
Boxee TV
38.0%
13.9%
11.0%
8.6%
7.8% 7.1%
39.5%
I do not own any of these Wi-Fi enabled device
Other
22
Pay-TV Providers’ TV Everywhere Offerings
State of Awareness: In Q3 2016, 47.1% of respondents are aware their
TV EVERYWHERE: AWARENESS
pay-TV provider offers an app that allows them to watch TV/movies on devices
such as a smartphone, iPad/tablet and/or computer/laptop. TVE awareness
increased 4.0% y/y, 5.5% over two years and 12.5% over three years.
Does your cable/satellite provider offer an app(s) that allows you to watch TV/movies on devices
such as a smartphone, iPad/tablet, or a computer/laptop?
+4.0% y/y, +5.5% over two years, +12.5% over three years
State of Adoption: 28.1% of respondents use their pay-TV provider’s TVE app,
an increase of 1.9% q/q, 4.2% y/y, 4.4% over two years and 8.5% over three years.
Q3 2016
State of Viewing and Engagement: Of those respondents, 58.4% use
Q3 2015
their TVE app on a weekly basis, a slight increase q/q, and 16.6% y/y. The category
“Four days a week” increased 1.8% q/q, 2.4% y/y and 3.1% over two years.
47.1%
43.1%
Q3 2014
41.6%
YES
Q3 2013
34.6%
0
10%
20%
30%
40%
50%
TV EVERYWHERE: ADOPTION
TV EVERYWHERE: WEEKLY USAGE
Do you access your cable/satellite provider’s TV offering on your iPad/tablet, smartphone, and/or
computer/laptop?
If yes, how often do you use your cable/satellite provider’s app, or TV everywhere offering, on a
weekly basis?
Q3 2016
+1.9% q/q, +4.2% y/y, +4.4% over two years, +8.5% over three years
Q2 2016
Q3 2015
+16.6% y/y
Q3 2016
60%
28.1%
Q2 2016
50%
26.2%
58.4%
57.6%
40%
Q3 2015
YES
23.9%
42.3%
30%
28.7%
Q3 2014
20%
23.7%
Q3 2013
5%
10%
15%
28.1%
10%
19.6%
0
23
41.8%
20%
25%
30%
12.9%
14.3%
0
WEEKLY
(1-7 days)
RARELY
(<1 day)
NEVER
15.9%
Pay-TV Providers’ TV Everywhere Offerings
TVE: CONTENT DISCOVERY USAGE
Do you leverage any of the following features in your cable/satellite provider’s app?
(choose all that apply)
Q3 2016
Q3 2015
39.3%
33.9%
0
SEARCH
(You type in a
title or topic
to search for)
24
RECOMMENDATIONS
(Similar Titles,
Suggested for You,
Because You
Watched)
NO
These are offered,
but I do not use
these features
10.2%
10.9%
10%
11.4%
24.3%
20%
32.1%
+2.2% q/q ,+2.6% y/y
24.7%
30%
-1.8% q/q ,-7.2% y/y
26.9%
40%
+7.5% y/y
38.6%
It is worth noting that the answer choice “No, these are offered, but I do not use
these features,” which represents those who choose not to engage with the discovery
technology offered to them, decreased 1.8% q/q and 7.2% y/y.
50%
44.9%
• “Recommendations (Similar Titles, Suggested for You, Because You Watched)” –
26.9% (increased 2.2% q/q and 2.6% y/y)
Q2 2016
57.0% use Search and/or Recommendations: +2.3% q/q, +6.5% y/y
• “Search (you type in a title or topic to search for)” – 46.1% (increased slightly q/q and
7.5% y/y)
46.1%
In addition to actual usage, TiVo tracks respondent engagement with functionality
created by pay-TV providers to ease content discovery on TVE apps. In Q3 2016, 57.0%
of respondents are engaged with the search and/or recommendations provided in their
TVE app. Engagement saw positive growth overall of 2.3% q/q and 6.5% y/y. Below is a
breakdown of overall engagement with content discovery functionality:
NO
These are NOT
offered in my
cable/satellite
provider’s app
TV Network Apps
In addition to pay-TV providers’ TVE offerings, TV networks continue to deploy
and update enticing mobile apps that connect the viewer to their content. While
many of these apps require the viewer to have pay-TV service in order to view
content, the industry is seeing a shift with networks, such as HBO and CBS,
launching subscription-based access without the requirement of a pay-TV login.
While overall adoption (28.4%) isn’t enormous, there is positive growth in weekly usage
by respondents who do use TV network apps. Below is a highlight of Q3 2016 usage of
TV network apps:
In Q3 2016, 28.4% of respondents use one or more TV network apps, an increase of
2.6% y/y. The top TV network apps respondents use are:*
• Additionally, respondents are using these apps more—five to seven days a week, to be
specific—increased 4.1% y/y and 6.8% over two years.
4. WatchESPN – 4.8%
5. CBC – 3.8%
6. CBS – 3.8%
TV NETWORK APPS
How often do you use these TV/TV Network apps?
*There was a tie for fifth-most-used TV network app.
Q3 2016
TV NETWORK APPS
80%
Do you have any of the following TV/TV Network apps downloaded on your iPad/tablet and/or
Smartphone? (choose all that apply)
74.2%
0
2.8%
2.7%
2.6%
WEEKLY
(1-7 days)
RARELY
(<1 day)
7.1%
10.2%
5.8%
40.9%
33.7%
5.3%
10%
3.0%
29.1%
20%
3.4%
27.7%
30%
3.8%
52.0%
3.8%
56.1%
40%
NEVER
2.5%
2.5%
5-7 Days a Week: +4.1%y/y, +6.8% over two years
2.5%
2.4%
20%
2.4%
13.8%
2.4%
2.3%
2.1%
1.9%
(renamed to Freeform)
MTV
PBS Kids
Nickelodeon
MSNBC
The CW
Turner Entertainment
10%
1.8%
1.7%
1.6%
1.5%
1.5%
0
1.0%
(CNN, TNT, CN, TBS, etc.)
0
25
4.8%
8.8%
Q3 2015
50%
8.5%
25.8%
4.8%
8.9%
NO, I do not
use any of
these apps
6.2%
71.6%
60%
3.7%
YES, I use
one or more
of these
apps
Q3 2016
4.8%
Q3 2014
70%
5.6%
Q3 2015
17.1%
28.4%
65.1%
+2.6% y/y
CNN
ABC
HBOGo
WatchESPN
CBC
CBS
NBC
FOX
HBO NOW
FOX News
BBC
A&E
NBC Sports
Showtime
Comedy Central
Disney
FOX Sports
Discovery Channel
History
ABC Family
Q2 2016
+1.9% q/q, +10.9% y/y, +15.0% over two years
67.0%
1. CNN – 5.6%
2. ABC – 4.8%
3. HBOGo – 4.8%
• 67.0% of respondents use these apps on a weekly basis, an increase of 1.9% q/q,
10.9% y/y and 15.0% over two years.
1%
2%
3%
4%
5%
6%
7 days
a week
6 days
a week
5 days
a week
4 days
a week
3 days
a week
2 days
a week
1 day
a week
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
In Q3 2016, 64.9% of respondents get frustrated “always” or “sometimes” when
trying to find something to watch on TV. The positive news for pay-TV providers
is that the response “Never, I can always find something” increased 2.5% q/q.
Another source of frustration when navigating the myriad of available content
sources and platforms is inconsistency in content availability. As consumers
become increasingly connected and mobile, many are discovering that some
content is only available on certain services, devices, or platforms, or that
specific episodes and seasons are trapped behind additional pay walls.
This data suggests that content owners must be cautious when implementing
fragmented access and pay structures. Long-term viewership and engagement should
be considered against short-term licensing incentives which may prevent viewers from
watching content in a seamless, continuous fashion.
TROUBLE FINDING CONTENT
Have you ever stopped watching a show that you previously enjoyed because it became too difficult
to access the content?
In Q3 2016, 28.2% of respondents have stopped watching a show they previously
enjoyed because it became too hard to access. Below are the primary drivers
for why the respondents “show-dumped” and gave up on the content:
28.2%
Q3 2016
YES
• “The content is not available on the streaming services I currently subscribe to” –
27.0%
NO
71.8%
• “New seasons and episodes were not available on a streaming service” – 24.8%
• “I downgraded my TV package and no longer have access to the channel the content
was on” – 21.1%
From the following list, please select the main reason the content became too difficult
to access:
FINDING SOMETHING TO WATCH
How often do you get frustrated when trying to find something to watch on TV?
The content is not available on
the streaming services I currently
subscribe to (e.g. Netflix, Hulu).
+2.5%q/q
11.8%
Q3 2016
53.6%
24.8%
21.8%
24.3%
11.3%
27.0%
New seasons and episodes were not
available on a streaming service.
12.3%
10.8%
64.9%
“Always” or
“Sometimes”
feel frustrated
IF YES...
Q2 2016
I downgraded my TV package and no
longer have access to the channel the
content was on.
54.1%
I cut the cord and the content is only
available on my Pay TV service.
21.1%
6.7%
Other
Never, I can usually always
find something
26
I sometimes
feel frustrated
I always
feel frustrated
N/A
20.4%
0
5%
10%
15%
20%
25%
30%
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
In addition to overall frustration, TiVo seeks to understand whether respondents
are leveraging third-party services to find something to watch. In Q3 2016, 34.3% of
respondents consult a third-party entertainment source, such as Rotten Tomatoes,
Moviefone, IMDb, Fan TV, etc. to assist them in finding something to watch on TV. For
the second quarter in a row, the top entertainment services used by respondents are:
RECOMMENDATIONS
Does your cable/satellite provider make recommendations of TV shows and Movies to you based on
your interests, past viewing habits, etc. (personalized to you)?
• “IMDb” – 14.9%
21.0%
YES
• “TV Guide” – 14.0%
11.0%
• “Rotten Tomatoes” – 11.6%
Q3 2016
68.0%
NO
N/A
THIRD-PARTY ENTERTAINMENT SOURCES
Do you use any of the following services to find something to watch on TV (not just for movie theater
information)?
14.9%
IMDb
14.0%
TV Guide
Rotten Tomatoes
11.6%
Moviefone
2.1%
Common Sense Media
2.0%
Fan TV
1.7%
IF NO...
Do you feel the recommendations
are accurate/relevant?
Would you like to have TV shows and movies
recommended to you (and personalized to
your likings)?
Q3 2016
Q3 2015
80%
70%
I do not use any
of these services
10%
20%
30%
40%
50%
60%
15.8%
Always
accurate
65.7%
0
IF YES...
70%
+3.1% y/y
60%
80%
61.5%
12.7%
50%
RECOMMENDATIONS
In Q3 2016, 21.0% of respondents answered that their pay-TV provider makes
recommendations for relevant TV shows/movies. This remains relatively flat q/q and
y/y. Of the 68.0% of respondents who do not receive recommendations, more than half
(38.5%) would like this functionality in order to improve the discovery of their TV shows/
movies. Pay-TV providers have made great strides in rolling out this functionality on TVE
experiences, but STBs need to be expedited to keep up with the competition.
Equally important to overall usage of recommendations is accuracy of recommendations.
In Q3 2016, 93.9% of respondents feel they are “always accurate” or “sometimes
accurate.” Pay-TV providers will be pleased to know that the answer “always accurate”
increased 3.1% y/y.
27
40%
78.1%
Sometimes
accurate
30%
79.4%
38.5%
20%
10%
6.1%
Never
accurate
0
7.9%
0
20%
40%
60%
80%
YES
NO
New:
Quarterly Tips Series:
LEVERAGING DATA IMPROVES MARKETING EFFORTS
In early October, HBO shared how the use of data has accelerated its marketing
campaign planning from as much as six months in advance to almost real time.2 The
Streaming Media article described how after the launch of its new offering, HBO Now,
the network was able to interact directly with consumers for the first time. According
to the article, on a daily basis, the HBO Now team reviews and leverages its subscriber
data, and then adjusts HBO’s marketing campaign efforts as quickly as the next day.
Capturing subscriber data allows video service providers to identify clusters, or
segments of viewers, for similar viewing interests and overlaps in viewing behavior.
Thus, video service providers can identify new content to promote as well as
subscribers who may be in favor of upgrading to a premium package—both of which
should be A/B tested with each of these segments.
TiVo has spent a great deal of time educating pay-TV providers, digital publishers and
CE manufacturers on how to utilize real subscriber data to deliver targeted content
recommendations and promotions, and struggles to understand why many providers
are slow to do so. When video service providers are asked about using data to deliver
targeted marketing campaigns, feedback varies and includes the following:
Examples of the Power of Data to Deliver Targeted Marketing
• It’s a challenge to get all the various data sources combined into one
central location.
• The BI team is overwhelmed and does not have the bandwidth to support these
efforts within a reasonable turnaround time.
• The resources do not exist to manage large amounts of data.
TiVo feels the video industry must tackle the obstacles holding it back from
leveraging subscriber data. Doing so can begin with something simple; for instance,
when a pay-TV provider captures every click on the remote, that information alone is
enough to segment a subscriber base in order to better target and test various content
and promotions.
2 Krefetz, Nadine. “How Data Is Changing HBO.” Streamingmedia.com. N.p., 4 Oct. 2016. Web. <http://www.
streamingmedia.com/Articles/Editorial/Featured-Articles/How-Data-is-Changing-HBO-113915.aspx>.
28
1. Launch seasonal promotions: Fall is a great time to leverage data as new series
are introduced and existing TV shows have season premieres. For example, when
a viewer chooses to set his or her DVR to record the new “Kevin Can Wait” series
premiere, the data can be compared to other season premieres in order to provide
valuable information back to the network regarding the number of households
planning to watch the episode.
2. Conduct tests based on data: The use of data enables testing, which takes the
analysis one step further. Not only can video providers test, but they also have enough
data to conduct A/B tests, which ensure promotions meet internal expectations
before being sent to the entire audience. By leveraging these results, personalized
recommendations of new TV shows/series can be boosted or promoted to the correct
target audience. For example, TiVo recently completed a multivariate A/B test for a
customer, in which the goal was for viewers to click through to the details page of a
new series premiering in the coming weeks. This multivariate A/B test ran across the
provider’s set-top boxes and TVE platforms—plus it included key variables, such as time
of day and favorite series. The winning test campaign had an increased click-through
rate of 30.0%, as compared to the control group that did not receive the promotion.
New:
Quarterly Tips Series:
LEVERAGING DATA IMPROVES MARKETING EFFORTS
3. Target at-risk subscribers through segmentation: Another area of
The Use of Segmentation for a Targeted Content Promotion
content targeting is segmenting viewers who are at high risk to churn. Usually
this group consists of low-viewing/low-engagement viewers who typically
watch a few hours of television per week, and often it’s the same two to four
shows. Additionally, “low-engagement” means they are not leveraging VOD
or TVE offerings. Rather than including this segmentation in “spray-and-pray”
marketing campaigns, video service providers can target these viewers based
on content watched.
Segment viewers by common viewing
habits. Groups close together have
similar viewing habits vs. those farther
apart have limited, to no similarities.
Once this at-risk group is identified and segmented, providers can test
various promotions. For example, if a segment of this group watches a
considerable amount of “NCIS” on CBS but doesn’t watch “Bones” on FOX,
boost “Bones” to that group. Another example is to segment viewers who
watch “Gotham” on FOX, but do not watch the similar series “Blindspot”
on NBC.
When TiVo ran a similar campaign for a customer, the test results showed
that more than 10.0% of viewers stuck with the content, thus increasing
overall engagement. By leveraging this information as well as running
univariate and multivariate A/B tests, video service providers can act on their
data to drive engagement, increase viewing, and even grow ARPU (Average
Revenue Per User).
This group views high
amounts of NCIS
only, but not Bones
This group views
high amounts
of both NCIS
and Bones
Non-Engaged
High Viewing
Engaged
High Viewing
Take viewers who only
watch NCIS and segment for
Bones promotion. Identify
viewers who are in the low
engaged, low viewing group
for the Bones promotion.
Non-Engaged
Low Viewing
29
Engaged
Low Viewing
Note: A dot represents a household
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
SEARCH
TEXT SEARCH
Search is one form of content discovery, and like the video industry as a whole, this
functionality has evolved over the lifetime of this report. Therefore, this report breaks
search functionality into three categories: lists or category searches, text search and
voice search.
Do you ever type in a TV show, movie title, or topic into
a search box to find something to watch in your
cable/satellite guide?”
Q3 2016
Q2 2016
Do you feel the search results
are accurate?
Q3 2015
+3.1% q/q, +4.7% y/y
Lists or Category Searches
+3.7% q/q, +3.4% y/y
100%
Many pay-TV providers offer pre-defined category lists, or genre lists, as another
method of search. Therefore, new to the Q3 2016 Video Trends Report is a question
tracking usage of this functionality to find something to watch. Nearly 23.0% of
respondents use pre-made category lists to search for a specific channel or genre to
watch, such as “Family/Kids Shows” or “Lifestyle Channels.”
49.0%
80%
45.9%
YES
10%
20%
30%
Do you use the pre-made category lists to search for channels such as “Family/Kids Shows,” “Sports,”
“Lifestyle Channels?”
22.7%
YES, I feel the results
are accurate
50%
my cable/satellite provider does offer
this functionality
It takes TOO MUCH TIME
21.7%
19.1%
I AM NOT INTERESTED
in searching for TV Shows/Movies
21.5%
21.6%
34.6%
OTHER
40%
50%
+2.6% q/q
20.4%
19.4%
16.5%
18.8%
SEARCH IS NOT OFFERED
by my cable/satellite provider
40.6%
30%
Q2 2016
35.2%
35.7%
I DO NOT KNOW HOW
to use the search feature
NO, I don’t use this type of search, but
20%
Q3
2015
I ONLY WATCH A FEW CHANNELS
so no need to search
LIST/CATEGORY SEARCH
10%
40%
Q3 2016
• “I am not interested in searching for TV shows/movies” – 21.5%
0
Q2
2106
Why don’t you use the search functionality offered to you? (choose all that apply)
• “It takes too much time” – 21.7% (increased 2.6% q/q)
NO, and I don’t think my
cable/satellite provider offers
this functionality
Q3
2106
IF NO...
• “I only watch a few channels so no need to search” – 35.2%
YES
0
47.8%
0
Why are 49.8% of respondents not using text search? The top three reasons
respondents do not leverage text search functionality are:
84.7%
20%
45.6%
NO
84.4%
40%
49.8%
Additionally, 49.0% of respondents type a TV show/movie into the search box of
their STB to find something to watch, an increase of 3.1% q/q and 4.7% y/y. Of the
respondents who use search to find something to watch, 88.1% feel the results are
accurate, which increased 3.7% q/q and 3.4% y/y.
88.1%
60%
44.3%
Text Search
30
IF YES...
4.0%
3.9%
0
5%
10%
15%
20%
25%
30%
35%
40%
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
VOICE SEARCH
Voice search is the smallest of the three search categories, with 9.8% of respondents
reporting the ability to talk into their device to search for a TV show/movie, a percentage
which increased slightly q/q and 5.4% y/y.
Of respondents with voice search capability, 76.7% use it on a weekly basis. The largest
group (35.0%) conducts one to three searches per week, and the second-largest group
(20.1%) conducts four to seven searches per week.
While TiVo is aware that voice search is not yet offered by the majority of pay-TV
providers, it’s important to track awareness of this functionality. In Q3 2016, those
unaware of whether this functionality is available (also the second-largest group at
20.2%) increased 4.0% y/y. This means pay-TV providers need to continue marketing
service innovations to build awareness.
VOICE SEARCH
Do any of the devices you view TV and/or movies on allow you to talk into the device to search for a
TV show/movie, or change channels, etc.? (For example, use your voice to say, “Is a scary movie on now?”)
Q3 2016
Q3 2015
50%
48.2%
40%
42.9%
30%
+4.0% y/y
26.0%
20%
+5.4% y/y
10%
9.8%
9.1%
4.4%
0
YES,
I can use my voice
to find something
to watch
20.2%
18.0%
16.2%
5.2%
YES,
this is available to
me, but I DO NOT
use it
NO,
and I am not
interested in using
my voice to find
something to watch
NO,
but I would like
the ability to use
my voice to find
something to
watch
I am not sure if
this is available
to me
IF YES...
How often do you use voice search?
35%
35.0%
30%
25%
20%
23.3%
20.1%
15%
10%
9.5%
5%
7.7%
4.4%
0
<1 search
per week
31
1-3 searches
per week
4-7 searches
per week
8-11 searches 12-15 searches 16+ searches
per week
per week
per week
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
SOCIAL DISCOVERY
SOCIAL DISCOVERY
Twenty-four percent of respondents post about what they’re watching on social media,
up 1.8% y/y. Additionally, 38.4% of respondents choose to watch a show based on social
buzz, an increase of 4.2% y/y.
While these numbers are promising, TiVo recommends offering an equally enticing
social discovery feature that leverages subscriber data and segments groups based
on viewing habits in order to suggest content according to what’s popular among
similar groups.
Do you post about what you’re watching on social networks such as Twitter, Facebook, etc.?
Q3 2016
Q3 2015
4.1%
YES, frequently
3.5%
20.1%
YES, sometimes
24.2% post
on social
media:
+1.8% y/y
18.9%
NO, I do not use social
networks to discuss TV
shows or movies
SOCIAL BUZZ
Do you ever choose to watch a TV show or movie because of all the buzz it’s getting on Facebook,
Twitter, or other social networks?
Q3 2016
50%
30%
33.8%
43.9%
47.1%
30.5%
20%
10%
17.7%
4.6%
18.7%
3.7%
0
YES,
frequently
32
56.7%
19.4%
NO, I do not use
social networks at all
20.9%
0
Q3 2015
38.4% choose to watch
a show based on social buzz:
+4.2% y/y
40%
56.4%
YES,
sometimes
NO,
I do not use social
networks to find a TV
show or movie to watch
NO,
I am not on social
networks at all
10%
20%
30%
40%
50%
60%
Content Discovery:
Search, Recommendations, Social Discovery and Sports Discovery
SPORTS DISCOVERY
In Q3 2016, 34.0% of respondents have trouble “always” or “sometimes” when
trying to find something to watch on TV. Frustration with finding sports content
continues to increase, with slight growth q/q, 2.0% y/y and 3.2% over two years.
SPORTS DISCOVERY
Do you have trouble finding your favorite sports teams games, or do you ever miss sporting events
because it’s on a channel that is far down in your channel guide?
Q3 2016
Q2 2016
Q3 2015
Q3 2014
These two offerings demonstrate that the competition to pay-TV providers is
strong and growing stronger—so again, improving content discovery of sports
content and marketing these improvements to subscribers will remain essential to
increasing satisfaction.
52.3%
49.5%
34.0% “Always” or “Sometimes”
have trouble:
+2.0% y/y, +3.2% over two years
40%
49.7%
50%
50.6%
60%
16.9%
17.4%
17.4%
16.5%
27.5%
27.8%
3.3%
4.2%
10%
3.9%
20%
29.0%
29.7%
30%
4.3%
Pay-TV providers might feel threatened by various sports leagues going direct to the
consumer, but this further proves the immediate need to solve viewers’ challenges
in finding their favorite teams’ sporting event. For example, the National Hockey
League (NHL) recently announced a direct-to-consumer offering, called NHL.
TV.3 The NHL is offering two packages, one for $139.96, which allows access to all
games, and another for $24.99, which allows access to subscribers’ favorite team
only. Additionally, ESPN recently announced the launch of a direct-to-consumer
offering in 2017.4 While details are limited, ESPN’s CEO stated that the enormous
amount of digital sports’ rights creates a “treasure trove” for monetization.
0
Always
Sometimes
Never
N/A
3 Umstead, R. Thomas. “NHL Looks To Score With Digital Offerings.” Multichannel News. N.p., 12 Oct. 2016. Web.
<http://www.multichannel.com/news/sports/nhl-looks-score-digital-offerings/408387>
4 Farrell, Mike. Multichannel News. N.p., 21 Sept. 2016. Web. <http://www.multichannel.com/news/sports/iger-espnbamtech-service-will-be-focused/407896>.
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