10/02/2013 03:16 pm ET Updated Dec 02, 2013

TV Consumption: Traditional Subscriptions Dominate

PwC just completed some fascinating research on consumer attitudes and behavior relative to choice in video content. The goal of this research was to explore current video subscription services as well as desires for new services and package options. Specific objectives were to explore consumer desires and attitudes toward:
  • Consumers' current behavior and preferences for video packages, including why they prefer what they prefer,
  • Optimal video packages and amounts consumers are willing to pay,
  • Critical factors of influence for TV show/channel selection,
  • Willingness to watch ads in lieu of paying fees, by device,
  • Nature of interaction of mobile device use with traditional and online video
  • Consumption patterns related to content viewing: live versus recorded
What did we learn?
  1. Consumers generally subscribe to more than one service. With traditional video subscriptions as the foundation, there is an opportunity to continue to make this venue even more viable with original programming and customization options.
  2. Consumers continue to want control over when and where they watch their TV content, and what it will be. TV Everywhere services are growing in usage and importance to consumers and can differentiate subscription providers. With this said, there is an opportunity to "push" live TV consumption, since certain shows (especially news, sports, and reality genres), can command more of a "live" presence.
  3. Customization is empowerment. Being able to design their own subscription packages gives consumers a sense of control - especially as it involves how they spend their money. They want to know that they are paying only for what they want to watch. There is an opportunity, via programming, "recommendation engines," and pricing options - designed by the subscription services - for subscription services to "excite" the consumer by making them feel more empowered. And also discover new content and channels.
  4. Having an online presence with a strong content recommendation engine opens the door to content discovery. In the absence of knowledge of the content specific services provide, consumers will consult online sources to find out about new programming. Even if friends and family make recommendations, there is a likelihood that online sources will be consulted to provide more information on programming. And some consumers believe the recommendation engine makes better recommendations due to a better understanding of their preferences than friends/family.
  5. Consumers are generally willing to watch ads in lieu of fees. This has become a mainstream expectation for consumers. And willingness increases with the ability to select advertising categories related to individual interests. Given that consumers are more receptive to viewing ads on the the larger screens, such as TV and computer, they will likely be more amenable to ad-attached packages for these formats than for tablets or mobile phones. Also, there may be an opportunity to "wean into" acceptance on the smaller screens if fees are more substantially reduced.
  6. The use of mobile devices while watching TV content is prevalent and, based on the qualitative discussion, on the rise. Consumers seem to enjoy the interaction between the television content and their mobile device. There is an opportunity to better integrate "live" shows, especially with the younger demographic, with content-related links for more information about the show. This increases engagement with the show and could perhaps promote more "live" viewership.
  7. There is a lack of consensus on the effect of increased availability of online content on the value of traditional subscriptions.

To maintain the value of traditional subscriptions, providers must continue to offer exclusive programming that is either not available online or is only available in a less timely fashion.

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