Parks: Broadband Cord-Cutters Switching to Mobile Video

Broadband households in the United States likely to cut the pay-TV cord in the next 12 months are switching to mobile video, according to new data from Parks Associates.

The Dallas-based research firm said broadband households cutting the cord in the next 12 months watch more than six hours of video content on their mobile phone a week, compared to 2.5 hours among all domestic broadband households.

Parks said the market trends have spurred Comcast and Charter to introduce mobile services as a way to extend their service-based product portfolios.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“Roughly 10% of broadband subscribers are likely broadband cord-cutters, with half of them highly likely to make the change in the next 12 months,” principal analyst Brett Sappington said in a statement. “Many are satisfied with their current provider overall, but these subscribers are aware of the other options available to them and could become actual cord-cutters if their current service does not continually meet their needs.”

The research notes that 66% of broadband households currently subscribe to a cable Internet service, 33% subscribe to DSL or fiber optic or use mobile data services. Verizon, AT&T, and Frontier are the largest providers of DSL and fiber-based fixed-line services.

“Potential broadband cord-cutters rely on their mobile devices for entertainment,” Sappington said. “They are significantly more likely to watch live video content via mobile, including live TV broadcasts and livestreaming, averaging an hour more per week each compared to average broadband households. As 5G mobile and 10G fixed broadband services start to deploy, the substantial performance improvements will be attractive to this segment of subscribers, which will drive many providers to match these offerings in order to achieve parity in competition and messaging.”

U.S. Broadband Households Who Watch Mobile Video More Likely to Cut Cord

U.S. broadband households highly likely to cut the cord in the next 12 months watch more than six hours of video content on their mobile phone a week, compared to 2.5 hours among all U.S. broadband households, according to research from Parks Associates.

The report Examining Broadband Cord Cutters notes that fixed broadband providers that do not offer mobile services are particularly susceptible to cord-cutting among their current subscribers. These market trends drove U.S. cable operators Comcast and Charter to introduce mobile services as a way to extend their service-based product portfolios, according to the report.

“Roughly 10% of broadband subscribers are likely broadband cord-cutters, with half of them highly likely to make the change in the next 12 months,” said Brett Sappington, senior research director and principal analyst, Parks Associates, in a statement. “Many are satisfied with their current provider overall, but these subscribers are aware of the other options available to them and could become actual cord-cutters if their current service does not continually meet their needs.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

The research notes that two-thirds of broadband households currently subscribe to a cable internet service, three in ten subscribe to DSL or fiber optic, and one-third use mobile data services. Verizon, AT&T, and Frontier are the largest providers of DSL and fiber-based fixed-line services.

“Potential broadband cord-cutters rely on their mobile devices for entertainment,” Sappington said in a statement. “They are significantly more likely to watch live video content via mobile, including live TV broadcasts and livestreaming, averaging an hour more per week each compared to average broadband households. As 5G mobile and 10G fixed broadband services start to deploy, the substantial performance improvements will be attractive to this segment of subscribers, which will drive many providers to match these offerings in order to achieve parity in competition and messaging.”

Parks: Virtual Reality (VR) Headsets Remain Niche Video Game Product

Virtual reality (VR) has often been suggested as home entertainment’s future technology. New research from Parks Associates, however, finds that the video game industry remains the primary use case for VR headsets.

Parks found that while 25% of domestic broadband households are familiar with VR technology, just 8% of households use it. Among consumers who own or are familiar with VR, 54% use their headset or would use it for gaming.

“Sixty-two percent of U.S. broadband households play video games, and while gamers are a passionate market segment, they can be limited in scope, which has stalled adoption of VR to a wider audience,” analyst Billy Nayden said in a statement. “There has been some notable video content developed for VR, such as Alejandro G. Iñárritu’s short video experience Carne y Arena, which won an Oscar, but overall lack of quality, non-gaming content is inhibiting broader adoption.”

Parks Associates: Expected Virtual Reality Use Cases

 

 

 

 

 

 

 

 

Parks said 15% of domestic broadband households have tried VR, while 52% of headset owners report owning a smartphone-based system. PC-based systems and game console-based systems are the next most popular systems, with effectively the same adoption rate.

Another 28% of game console owners are familiar with VR headsets, and familiarity is even higher among owners of newer consoles.

Content quality remains a challenge for VR headset owners, with 55% of VR headset owners feeling that content for their device has remained the same since they bought their headset and 3% believe it has gotten worse. The report notes the main barriers for VR content development are costs, the demand for interactivity, and limits on content length.

Mobile headsets are capable of playing most non-gaming content in VR but often cannot play premium games and have much lower NPS scores than other headset types. For gamers, PC-based and game console-based systems are the primary VR headset option, though standalone VR headsets are promoted as a cost saver.

“The aim of standalone VR headsets is to offer much of the same premium content as game console or PC-based headsets, without the need for additional hardware like a gaming console or high-powered PC,” Nayden said. “This technology drastically reduces the cost for consumers, while providing a more premium experience than smartphone-based systems.”

 

Research: U.S. SVOD Household Spending Steady Since 2016 at Just Under $8 Per Month

U.S. broadband household spending on subscription OTT video services has held steady for three years, averaging just under $8 per month since 2016, according to research from Parks Associates.

The figures suggest adoption of multiple services or expensive services by some consumers is offset by a larger base of consumers who either subscribe to one or two relatively inexpensive services or who do not spend any money on OTT video services (30% of consumers), according to Parks Associates.

Subscribe HERE to our FREE daily newsletter!  

“The stability in average household spend belies the activity going on under the surface,” said Brett Sappinton, Parks Associates senior director of research, in a statement. “2019 may be poised to break that trend. Netflix, Hulu and Amazon continue to pack on new subscribers. At the same time, services like ESPN+ are also experiencing phenomenal growth, and new offerings from Disney and WarnerMedia are set for release later this summer. One of three things will happen — more households will become OTT streaming households, rival services will begin to pull subscribers away from Netflix, or that spending number will go up.”

Parks Associates will discuss strategies to launch successful services in the complimentary webcast “Avoiding OTT’s Top 5 Mistakes,” co-hosted with Swrve March 26 at 11 a.m. CST.

“The deluge of OTT platforms has created greater competition for video based on choice and quality of content,” said Barry Nolan, chief strategy officer at Swrve, in a statement. “Yet as people spend more and more time consuming digital media, OTT platforms are seeing a lag in customers insights, loyalty, and revenue. We believe that by delivering the perfect message at the perfect time, OTT platforms will have a richer and more enduring experience with their customers.”

Research: More Than 52% of Broadband Households Report Watching Internet Video on a Connected TV

A majority (52%) of U.S. broadband households are watching online video on a TV that is connected to the internet, according to research from Parks Associates.

The study, 360 View: Digital Media and Connected Consumers, also finds that watching TV or movies at home is the most popular leisure activity among U.S. broadband households, with 55% selecting this among their top two favorite leisure activities.

“While the total number of hours consuming videos has declined, consumers are watching more internet video on the largest screen available,” said Billy Nayden, research analyst with Parks Associates, in a statement. “The number of hours consumers report watching video on a TV increased for the first time since 2014, with connected devices enabling internet video services on TV and shifting consumers away from PC and mobile viewing. As OTT competition becomes a battle for the living room, the challenge for device makers and content producers is finding the correct product mix to maximize both profit and utility.”

The study found subscriptions are the dominant business model for OTT services.

As more services emerge, many stakeholders fear an impending subscription overload in U.S. households, according to Parks.

“As consumers’ taste for OTT experimentation wanes, they will start to resist the push to add another monthly subscription to their households,” Nayden said in a statement. “Many providers are starting to lead with freemium and ad-based models, in anticipation of this pushback.”

Other findings were:

  • 19% of consumers subscribe to either Netflix, Hulu or Amazon Prime Video and another OTT service, compared to 13% in 2017;
  • Consumers watched 25.7 hours of video per week in 2018, down from 29.5 hours per week in 2016;
  • Local broadcast/channels and programs are the most enjoyed type of programming.

Research: 71% of U.S. Broadband Households Own a Connected Entertainment Device

Nearly three-fourths of U.S. households (71%) own a connected entertainment device, according to new research from Parks Associates.

The research firm’s white paper, Changing Dynamics of the Smart Home: Opportunities for Service Providers, sponsored by Calix, also found that among consumers who own either a connected entertainment or smart home device, more than 60% have more than one.

“The average U.S. broadband household owns more than ten IoT devices, crossing entertainment, smart home and health use cases,” said Parks VP Denise Ernst in a statement. “These trends, combined with innovations in cloud technologies and service provision, create real opportunities for service providers to enter the smart home space with offerings that provide flexible support options and protections for a household’s data and privacy.”

The whitepaper details consumers’ concerns with data privacy and security, as well as their needs and demands for support services. Additional findings in the report were that 26% of U.S. broadband households own at least one device from a list of common smart home devices and that approximately one-third of connected entertainment device owners and one-half of smart home device owners who set up their devices themselves experience problems.

“In today’s connected lifestyle, consumers value flexibility in their choices,” Ernst said. “A service provider’s ability to address consumers’ problems in the method they prefer is a distinct advantage, particularly in today’s IoT environment.”

Research: 310 Million Global Connected Households to Have at Least One OTT Service by 2024

More than 310 million connected households will at least one OTT service by 2024, according to a new report from Parks Associates.

The report, OTT Video Services: Disruptive Globalization, estimates approximately 200 million households had at least one OTT service at home at the end of 2018.

“The U.S. leads in adoption of subscription OTT services, but other regions are experiencing significant growth as new services expand across borders,” said Brett Sappington, Parks Associates senior research director, in a statement. “Content producers and OTT service providers want to capture audiences, and revenues, worldwide. As a result, Western Europe and other global markets will experience more rapid subscriber growth than North America over the next few years.”

Global audiences also represent unique challenges that OTT providers must understand and navigate in order to be successful, Parks noted. Device preferences, for example, vary significantly from country to country — while U.S. households prefer smart TVs or streaming media devices, Canadians more often use game consoles than the Americans, and in Asia, smartphones and mobile-only devices are most prevalent, according to Parks. In many nations, connected households have mobile high-speed services only, with no access to fixed services, Parks noted. Other factors, including regulations, business models, viewing habits, and service mix, are also key areas of consideration.

“Ultimately, the success or failure of a service relies on the quality of its content library, but small variations in pricing and user experience can cause significant adoption differences across countries,” Sappington said. “For example, HBO has tested its OTT service with pricing tailored to specific regions, with variances from Spain to the Nordic countries to the U.S. This level of experimentation will continue in the near term as service providers and content creators continue to test and tweak to find the right formula for pricing, content, and service quality for each region.”

Additional findings from the report include:

  • Roku is the streaming media device supporting the most OTT services (66% of all available) in the U.S.
  • Nearly two-thirds of OTT services available in the U.S. are available in at least one additional market.
  • Bollywood’s T-Series YouTube channel has 74 million subscribers.
  • 70% of broadband households in the U.S., 64% in Canada, and 52% in the U.K. have at least one OTT service.

Report: Entertainment Voice Control Appeals to Half of U.S. Broadband Households

Close to half (43%) of U.S. broadband households that own or plan to purchase a smart TV or streaming media player consider voice control to be an important feature for their next purchase, according to new research from Parks Associates.

Meanwhile, more than half (55%) of U.S. broadband households find voice control of connected entertainment devices appealing.

The industry report The Impact of AI on Consumer Entertainment examines the impact of artificial intelligence on the entertainment industry and the future role of AI in user experience, service delivery, content creation and monetization of video services.

“Artificial intelligence is used across the connected entertainment value chain by leading companies to gain cost advantages, increase speed to market, and strengthen customer loyalty,” said Craig Leslie, senior research analyst, Parks Associates, in a statement. “Consumers expect new connected entertainment products and services to offer voice as a control and search option; AI solutions will help companies remain competitive in the future.”

The report also addresses the impact of AI on data, as AI requires monitoring large quantities of personal data and creates concerns for consumers about security and privacy.

“Seventy-five percent of U.S. broadband households want tight control over their personal data, and over half are concerned about unauthorized users gaining control of their data,” Leslie said in a statement. “Less than one-third of consumers trust their providers to adequately safeguard their data, so providers need to deliver a promise of strong data security with granular control of what is shared and with whom, to encourage consumer participation and willingness to share data.”

Additional research from the report found:

  • In early 2018, the average broadband home hosted 10.4 connected devices, of which 8.6 are connected CE devices;
  • 49% of U.S. broadband households find that a website/app that allows you to delete collected data would increase their confidence in use of an online service; and
  • Netflix credits its recommender system for influencing 80% of hours streamed, with the remaining 20% coming from search.

Report: 16% of U.S. Broadband Households Admit to Sharing Video Service Passwords

A Parks Associates report found 16% of U.S. broadband households admit to sharing their passwords for their video service accounts with other people.

According to the report, Innovations in Authentication and Personalization Technologies, service providers will have a difficult time moving subscribers to new methods of password-free authentication. Only one-third or fewer of U.S. broadband households are willing to use a non-password authentication method such as voice or thumbprint, while 54% of U.S. broadband households are willing or very willing to enter a username and password once and save it on a device.

“Passwords represent risk for both users and service providers due to piracy and password sharing, but the password concept is ingrained in consumers’ conception of the online video experience,” said Billy Nayden, Parks Associates research analyst, in a statement. “The push to staunch password sharing and piracy is driving initiatives where each interaction is graded based on prior user behavior, using data points like geography, time and watching behavior. Grading ensures that interactions that need a high level of security receive it while routine interactions allow users a frictionless experience. The authentication process will become virtually invisible to users, except when they attempt to access services outside their normal behavior.”

Password managers such as LastPass and physical security keys are currently fulfilling the need for better management and security around passwords, according to Parks. Google entered the physical security key market in 2018, to compete with major players Yubico and Feitian.

“To drive adoption of new authentication methods, the industry needs to deliver a frictionless user experience, bringing a more personalized approach to authentication in addition to increased security,” Nayden said in a statement. “Poor experiences with authentication and personalization technologies will drive consumers back to traditional methods and increase churn for video services. The smartphone will be one of the gateway devices toward a more biometric approach to user authentication — the top 15 smartphone models in the U.S. all have some form of biometric technology.”

Innovations in Authentication and Personalization Technologies explores the readiness of new personal identification and authentication technologies for market deployment, analyzes best-fit use cases, and profiles major players that provide authentication and identification technologies or solutions.

The report also found 62% of consumers indicate they are very concerned about someone hacking an online service and obtaining their personal information, and 14% of respondents using a smart device or app with a personal assistant say that asking for information on scheduling for programs on TV is their most desired function with voice control.