Report: Multiscreen Data Changing TV Viewership Numbers

The final season of “Game of Thrones” set weekly viewership records for both the series and HBO network. Much of that data is attributed to how consumers have changed watching TV from a live event to on-demand and over-the-top streaming video.

New analysis from nonprofit Broadcasters’ Audience Research Board (BARB) in the United Kingdom contends traditional “overnight” viewership data represents only part of the picture. Indeed, displacement viewing has made tracking data correctly more complicated.

BARB suggests that on average people watch 29.3 daily minutes of time-shifted TV content, which results in a 15% uptick in overnight viewership. Sometimes that margin is even greater.

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Live viewing for the first episode of reality series “Shipwrecked” on Jan. 28th was watched by 219,000 people. But the 7-day viewership tally ballooned to 685,000.

TV viewership isn’t limited to the television anymore, thanks to TV Everywhere apps.

“Love Island” gained 27% incremental viewing from non-TV devices, while “Family Guy” viewership increased 8%. Nonetheless, as a whole, non-TV set devices add less than 2% to TV set viewing, according to BARB.

The report found that 1.15 million people watched the second episode of “Save Me” via Sky On Demand pre-broadcast. This was more than half of the total broadcast audience of 2.19 million. This trend increased throughout the series, with the final episode watched by 83% of viewers via Sky On Demand pre-broadcast.

BARB believes re-examining viewership trends is doubly important among the younger demo. Ad-supported YouTube and SVOD services such as Netflix and Amazon Prime Video remain the top challengers to pay-TV.

The report suggests that in 2018, unidentified viewing accounted for 48 daily minutes for all individuals, rising to 71 minutes for 16-34-year-olds.

BARB believes that for television to become a more efficient, targeted and digital-like medium, content and distribution need to be more vertically integrated.

“In this future, new measurement opportunities may complement the data offered by BARB through the likes of set-top box data. A more digital-like television future offers the opportunity to deliver precision at scale,” read the report.

Trusted and accurate measurement remains essential to accountability, planning and optimization, and increasingly so in a world where we see displacement, fragmentation and disruption.

“Ultimately, we need to understand the value that each [viewer] exposure drives for advertisers. The outcomes are what are important; measurement allows us to link exposure to value,” said BARB.

“The industry must come up with a measurement solution enabling better understanding of viewing patterns across all screens and channels. This is still some years away, even in the most advanced markets.”

Vidgo TV Seeks to Bow Pre-Paid Service in the U.S.

Taking a page from pre-paid phone cards, Vidgo TV plans to launch online TV service in the United States targeting users with little or no credit.

Speaking May 15 at the Pay TV Show in Denver, CEO Shane Cannon told attendees the online TV service would appeal to so-called “under banked” consumers with poor credit.

The platform — similar to online TV services such Sling TV, PlayStation Vue, DirecTV Now, YouTube TV, Fubo TV and Spectrum TV Plus — would be available via apps for smartphones and tablets, as well as Roku, Google TV, Android TV, Amazon Fire TV. Users could also cast the channel from their Internet browser to the big screen using Wi-Fi.

The company based in Atlanta launched a $24.95 monthly Latino version of Vidgo TV last winter featuring Univision, TV Azteca and beIN Sports programming, among 30 channels. As expected, Cannon told attendees 70% of Latino users stream sports.

In an interview last year Cannon said build-up of Vidgo TV has taken years to develop and ready for market. It is currently in beta launch.

“It takes that long to integrate into these platforms” Cannon told FierceVideo. “We’ve spent two-and-a-half years building this distribution model.”

AT&T CEO: WarnerMedia Looking to Partner SVOD Service With Pay-TV Operators

WarnerMedia’s pending fourth-quarter soft-launch of a branded subscription streaming video service will look to partner with — rather than antagonize — third-party pay-TV operators.

Speaking May 14 at the JPMorgan Global Technology, Media and Communications  Conference in New York, Randall Stephenson, CEO of AT&T, said the service would be centered around HBO and be included with a pay-TV subscription.

“The MVPDs, Comcast, we think are going to be an important partner to all of this,” Stephenson said. “If you’re a Comcast subscriber and you acquire HBO, you will get this [OTT video] capability with your HBO subscription on Comcast.”

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The proposed symbiotic relationship between SVOD and linear television distribution is significant considering the former was launched in part to replace pay-TV.

Indeed, Dish Network launched pioneering Sling TV in 2015 in an effort to offset declining satellite TV subscribers. AT&T followed with DirecTV Now.

Yet, online TV subscriber growth has cooled. Sling added just 7,000 subscribers in the most-recent fiscal period, and DirecTV Now lost 83,000 subs compared to a gain of 312,000 subs last year.

Stephenson said the new SVOD service is projected to generate “tens of millions of subs” — a figure dependent upon AT&T sustaining its base of DirecTV and U-verse subscribers.

The strategy is not dissimilar with Comcast, which plans to launch an OTT service free to Xfinity subscribers, with non-subscribers charged a monthly fee.

“Keeping the satellite, the U-verse customer base in check and stable is really important because it’s going to be a major distribution platform [for SVOD],” Stephenson said. “And then we want to just continue to push digital distribution on top of that as well.”

Much of that distribution will be centered around HBO, which is currently generating strong viewership through the last season of “Game of Thrones”.

Stephenson said content investment at HBO has “stepped up considerably” this year with the second seasons of “Big Little Lies” and “Succession” slated to follow “Thrones,” in addition to new series, “Chernobyl”.

“We’ve got a lot of really great content coming online as ‘Game of Thrones’ winds down,” he said.

Kagan: Pay-TV Households Declining to 70.5 Million by 2023

The migration of U.S. consumers away from traditional multichannel pay-TV has been ongoing for the past decade and the shift is expected to increase moderately in the next 12 months, with several noteworthy accelerants contributing to long-term subscriber losses, according to Kagan, a media research group within S&P Global Market Intelligence.

While traditional multichannel video subscriptions has long been the top home entertainment choice for U.S. households, the loss of content exclusivity is expected to shift the consumer base towards over-the-top video services such as Netflix, Amazon Prime Video and Hulu, and fuel the growing ranks of online-only video households.

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At the same time, Kagan contends increased prices for broadband, coupled with a series of OTT price hikes are impacting subscriber growth in the virtual multichannel space – notably at DirecTV Now and Sling TV. However, the combined households relying on traditional and virtual multichannel services for video entertainment are still expected to account for the majority of occupied homes through 2023 with 64% of the market.

Indeed, Kagan projects total traditional multichannel subscriptions (including residential and commercial) will drop 16.4 million to 73.6 million. Traditional residential multichannel households (excluding commercial and overlap) will drop 15.6 million to 70.5 million.

Virtual multichannel households will increase 6.4 million to 13.5 million. Combined traditional and virtual multichannel will drop to 84 million residential subscribers. Online video-only (Sling TV, DirecTV Now, YouTube TV, PlayStation Vue, etc.) households will add 10.6 million subs to 25.2 million. Burgeoning over-the-air (OTA) digital antennae households will add 3.8 million households to 21 million.

Subscription Streaming Overtakes Physical/Digital Transactions in the U.K.

As expected, subscription streaming video and music services have supplanted physical/digital transactions in the United Kingdom, the world’s third-largest home entertainment market.

More than 60% of consumers collectively streamed music, video and video games in 2018, compared to 39% who purchased content in physical or digital formats.

“This is a significant moment,” Kim Bayley, CEO of the Entertainment Retailers Association, said in a recent statement.“New digital services have created a “generation rent” for whom [direct] access models seem natural. It is nothing less than a revolution in the entertainment business.”

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The trend mirrors the United States, where subscription streaming (i.e. Netflix, Amazon Prime Video, Hulu, etc.) accounted for 60% of consumer home entertainment spending in the first quarter, ended March 31.

Similar to U.S., the Internet and streaming are driving overall home entertainment segment growth. U.K. revenue grew for the sixth consecutive year in 2018 to a record £7.5 billion ($9.7 billion), up 9.4% from $8.8 billion in 2017.

Digital now accounts for 76.1% of revenue. As recently as 2011, digital’s market share was less than 20%. Around 85% of total entertainment retail revenue is generated over the Internet.

Meanwhile, sales of DVD, Blu-ray Disc and 4K UHD Blu-ray continue. Brits spent $523.5 million on DVD movies and TV shows; $145.7 million on Blu-ray and $21.9 million on 4K UHD Blu-ray.

“Video has gone full circle – from a rental-based business at the dawn of VHS, to an ownership model with DVD and now a subscription/rental model,” Bayley said.

NBC Universal Planning to Offer ‘The Office’ on New Streaming Service

NBC Universal reportedly plans to stream popular catalog sitcom, “The Office” on its pending streaming video service.

The media company owned by Comcast disclosed the move May 13 during its advertising upfront at Radio City Music Hall in New York.

Comcast is slated to launch a free ad-supported VOD service for Xfinity subscribers next year. Non-pay-TV subs would be charged an undisclosed monthly fee.

“While other companies are pushing advertisers out, we’re bringing you in,” said Linda Yaccarino, chairman of advertising and client partnerships at NBC Universal, told advertisers, according to Bloomberg, which first reported the move.

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Yaccarino is on Hulu’s board of directors, along with NBC Universal’s Matt Bond and Jeff Shell, chairman of Universal Filmed Entertainment. NBC Universal co-owns Hulu with Disney.

The programming decision is significant since “The Office,” along with WarnerMedia’s “Friends,” remains extremely popular on Netflix. The SVOD behemoth recently renewed an exclusive license agreement for ‘The Office” through 2020.

Last year, it reportedly paid WarnerMedia $100 million for exclusive rights to an additional single season of the sitcom.

Netflix earlier this year tweeted it had signed “Office” star Steve Carell for a new workplace comedy created by “Office” showrunner Greg Daniels about people working in the new armed services unit: “Space Force.”

Streaming Red: Disney’s OTT Venture Down a Fiscal Black Hole

NEWS ANALYSIS — Disney bought Marvel Studios in 2009 for $4 billion. It bought Lucasfilm (“Star Wars”) for another $4 billion three years later.

The acquisitions helped Disney reign supreme at the box office in 2018, 2017 and 2016, according to data from BoxOfficeMojo. And it has a commanding lead in 2019 thanks to Avengers: Endgame.

At the same time, the Mickey Mouse company is set to lose more than $2 billion on streaming investments — “Disney Streaming Services” (formerly BAMTech), Vice Media, ESPN+ and Hulu — before it even launches its much-ballyhooed new $6.99 monthly SVOD service Disney+ in November.

Earlier this year, Disney CFO Christine McCarthy said ESPN+ is projected to lose $650 million annually through 2020. The company just wrote-off more than $300 million on its minority stake in Vice Media.

And the much-hyped Disney+ SVOD platform is not projected to become profitable until 2024 — three years after CEO Bob Iger plans to retire.

“Streaming requires a strong stomach for losses, especially as you are playing catch-up,” Rich Greenfield, analyst at BTIG Research, told CNBC earlier this year.

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Down the OTT Rabbit Hole

As Disney saw Netflix growing exponentially worldwide — much of it based on streaming movies and TV series based on Marvel intellectual property, it switched its business focus from SVOD enabler to over-the-top provider.

Indeed, Iger says OTT video is the company’s No. 1 focus in 2019, regardless of the financial hits to the bottom line.

Hulu, which Disney majority owns along with Comcast, lost $580 million in 2018, while BAMTech, the backend tech firm acquired from Major League Baseball Advanced Media in 2017, spearheaded another $470 million operating loss for the company’s new direct-to-consumer and international operating unit (which also includes home entertainment).

And the fiscal hits continue.

DTC & International lost $393 million in the most-recent fiscal quarter (ended March 31), up from $188 million loss in the previous-year period. Through the first half of the fiscal year, DTC has lost $529 million, twice as much was lost in 2018.

“We expect our direct-to-consumer businesses to have an adverse impact on the year-over-year change in segment operating income,” McCarthy said in an understatement on the May 8 fiscal call.

Disney, of course, can arguably absorb the losses. It generated a $12.5 billion profit on almost $60 billion in revenue in 2018. That was before closing the 21st Century Fox transaction, which could help Disney reach $100 billion in revenue.

At the same time, the Fox acquisition upped Disney’s long-term debt from $18 billion to about $52 billion. Disney is also expecting about $2 billion of cost synergies absorbing 20th Century Fox Film Corp. and related businesses.

Thus far, Wall Street appears supportive, contending the Disney brand has the best chance of narrowing the SVOD divide with Netflix.

“I think Wall Street is at least accepting of the fact that we’re doing this, that it’s the most important thing we’re doing,” Iger told Barron’s in January. “And while I won’t say they’re cheering us on, they’re definitely giving us the room to prove that we can do it.”

Pay-TV Operators Lost Nearly 1.3 Million Subs in Q1

As expected, pay-TV operators lost myriad subscribers in the first quarter (ended March 31) due to ongoing consumer adoption of new home entertainment distribution options, including over-the-top video.

The top-10 pay-TV operators lost nearly a combined 1.3 million subscribers in the period, spearheaded by satellite TV, according to new data from Informitv. That loss is nearly 50% of all subscribers who cancelled service in 2018.

AT&T led all multichannel video program distributors with 544,000 subs lost through its DirecTV (satellite), U-verse and DirecTV Now brands. Dish Network lost 266,000 subs, or 1.2 million in the past 12 months.

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Charter Spectrum lost 152,000 subs, while Comcast lost 107,000. Verizon Fios lost 53,000, while Frontier and Mediacom lost 54,000 and 12,000, respectively. The ongoing industry losses prompted Cox Communications to stop revealing subscriber data.

The top 10 MVPD providers now penetrate about 70% of domestic households with nearly 82 million subscribers.

“They still command a significant number of customers, but the rate of attrition has increased,” Dr. William Cooper, editor of the Informitv, said in a statement.

 

 

Dish Widens Q1 Pay-TV Sub Loss as Sling TV Growth Cools

Dish Network May 3 reported it lost 266,000 pay-TV subscribers in the first quarter, ended March 31. That compared to a loss of 185,000 subs in the previous-year period.

The nation’s fourth-largest pay-TV operator ended the period with 12 million subscribers — down almost 1.1 million subs from 13.1 millions subs last year.

The loss reflects ongoing secular changes in the pay-TV market as increasing numbers of consumers opt away from linear television toward over-the-top video products such as Netflix, Amazon Prime Video, Hulu, HBO Now and Showtime OTT, among others.

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Separately, Dish’s pioneering online TV service, Sling TV, added just 7,000 subs in the period, compared to a gain of 91,000 subs last year. The standalone live streaming service ended the period with 2.41 million subs compared to 2.3 million subs last year.

Sling TV helped create an online TV market targeting cord-cutters and millennials that now includes PlayStation Vue, Spectrum TV Plus, DirecTV Now, YouTube TV, Fubo TV and Hulu with Live TV, among others.

While subscriber growth declined, revenue per Sling customer increased. The increase was mainly driven by three factors: Customers taking higher priced packages, increased add-on revenue from extras, ad sales and cloud DVRs, and the $5 increase on the orange package implemented in the third quarter of 2018.

“Sling’s promotions have done well for us but we are focused on attracting profitable customers,” Warren Schlichting, EVP and group president, Sling TV, said on the fiscal call. “It’s a marathon not a sprint. We like where we are, we like our position in the market with our competitors taking their prices out that’s only improved ROI, and you’ll see more of the same, in the second quarter from us.”

Without Sling, Dish’s legacy satellite TV subscriber base would be about 9.6 million – down almost 4 million subs (30%) in the past five years.

Report: 62% of Video Streamers Find Broadcast TV Irrelevant

With more than 1.23 billion people projected to subscribe to over-the-top video platforms by 2023, new data from German consultant Simon-Kucher found that 84% of U.S. survey participants have already replaced traditional TV with SVOD.

Indeed, 62% of U.S. respondents in the March/April survey of 490 respondents from nine countries (Australia, Brazil, Chile, France, Germany, Mexico, Singapore, U.K., U.S.), said they considered linear TV irrelevant.

“Growing numbers of viewers have turned their backs on linear television,” Lisa Jaeger, partner at Simon-Kucher, said in a statement. “They increasingly prefer ad-free video streaming services, a trend that will impact TV advertising on a grand scale.”

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In the U.S., the study found the top reasons cited for subscribing to a streaming service is the availability of a broad range of high-quality content, followed by price. Content exclusivity was listed as being least important.

“These insights give providers some leeway when it comes to pricing,” analyst Eddie Hartman said. “Provided they offer attractive content and remain ad-free, they can ask customers to pay a modest premium.”

Nearly 40% of U.S. participants prefer paying a higher monthly charge in exchange for having no commercial interruptions to their viewing experience, according to the report. Thirty-four percent indicated a willingness to accept a small number of ads in exchange for a lower monthly charge, and 7% percent a free, ad-supported plan.

Simon-Kucher contends Disney’s pending $6.99 streaming service Disney+ isn’t expected to disrupt the market. The study also revealed that potential users already find the Apple TV+ offering to be attractive, with 31% of U.S. respondents stating they would definitely subscribe to it, 56% stating they would consider subscribing to it, and 13% expressing no interest in it.

However, it appears unlikely that Apple will drive established OTT competitors out of the market, with 41% of U.S. survey respondents stating they would use Apple TV+ in addition to existing subscriptions, while another 41% would use Apple TV+ and probably cancel at least one existing subscription. No respondents stated an intent to use the Apple service exclusively and cancel all existing subscriptions.

“These findings are actually good news for the entire industry, with streaming providers having the chance to co-exist,” Jaeger said. “But to set themselves apart from competitors, they will need to commit to providing content that is attractive to consumers.”