Light Reading

Downloads Keep Highest-Value Customers Consuming

Laurie Lawrence
4/7/2014
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It turns out TV is hot again. And people who love watching it really love watching it.

Vubiquity recently surveyed 1,600 consumers who own and/or use smartphones and tablets and found out that there is a significant group of people out there who watch a lot of video on a lot of devices, and are willing to pay for multiple subscriptions.

Nearly half of all people surveyed (48%) were interested in downloading content to which they already subscribe to a device, and 63% of those were willing to pay between $1-5 extra per month to do it.

So who are these "downloaders," and why should service providers focus on feeding their need for content-on-the-go as part of their business strategy?

For one thing, downloaders watch more content across all platforms than typical users: 60% watch video on their smartphone at least weekly (compared to 43% of the total sample); 66% watch on their tablet (vs. 51%); 84 percent on their computer (vs. 60%), and 91% on their TV (vs. 83% ). They also are more likely to subscribe to premium channels such as HBO and Showtime, and to subscription streaming services such as Netflix, Hulu, or Amazon Prime Instant Video in addition to paying for a traditional MVPD (multichannel video programming distributor) service.

So what's the opportunity?

For traditional pay-TV providers, the ability to offer a compelling subscription video-on-demand service -- with download-to-play rights -- positions them to retain, attract, re-engage, and up-sell the high-value subscribers who willingly pay for the ability to watch more video. And because they offer Internet access as well, they are able to bundle video streaming and downloading services with faster speeds for subscribers to higher-tier services. As the current debate around net neutrality grows, this will be an issue worth watching.

For all the concerns about cord-cutters, at least half of viewers are adding to their traditional pay-TV subscription, rather than replacing it. As the younger demographics continue to move from device to device with relative ease and don't necessarily want to be tethered to the Internet to view their content, those service providers who can provide a seamless TV experience (whether the viewer is at home, in the air, or somewhere else) will continue to engage with the most voracious video consumers -- those who are willing to pay for more access to more titles.

In a hyper-competitive industry, doesn't it make sense to focus efforts on those customers who provide the clearest path to revenue growth? Forward-thinking providers will make the ability for subscribers to "download to play" a key component of their strategy over the coming year.

— Laurie Lawrence, CMO, Vubiquity

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mendyk
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mendyk,
User Rank: Light Sabre
4/8/2014 | 3:42:18 PM
Re: Money matters
But aren't "the kids" the ones opting out of conventional video services?
VubiquityLaurie
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VubiquityLaurie,
User Rank: Lightning
4/8/2014 | 3:36:38 PM
Re: Money matters
The data surprised us as well.  For most viewers, the TV is still the dominant platform for watching video, but younger viewers are changing that through their comfort with viewing on any device.  To take that trend a step further, we're talking about leveraging content rights for which viewers have already paid, and and allowing them to access the content even without an internet connection.  That is a very competitive -- and compelling -- feature compared to the standard OTT offering.  We believe this represents an opportunity for more traditional TV providers to continue to add value.

SarahReedy
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SarahReedy,
User Rank: Blogger
4/7/2014 | 6:29:57 PM
Re: Money matters
Yeah, I just don't see it happening, especially with younger users, who are apparently more likely to pay for it. Sure they want and expect content on any screen, but they are also quite adept at finding ways around paying for it. It'd have to have some value-add on top of the same content to get many to pay for it, IMO.
danielcawrey
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danielcawrey,
User Rank: Light Sabre
4/7/2014 | 1:05:28 PM
Re: Money matters
I am surprised that people would want to add to already ridiculous cable expenses. Of course, you've got to have broadband.

But adding cable TV to that costs a fortune in comparison to Netflix for a few bucks a month or Amazon Prime which has instant video tied to other services.

I just think that cable operators offer too many channels with relatively nothing on. 
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
4/7/2014 | 10:37:18 AM
Re: Money matters
Yes, money does matter. I think eventually there will be a shakeout of content that makes sense to deliver over all devices, and the content that makes sense to deliver only to select devices.

You saw a version of that the last couple of weeks with the NCAA basketball tournament. It used to be CBS would carry all of the games once the field was whittled down. But last games this year shifted to TNT and TrueTV. CBS apparently felt ratings were better with it's traditional Saturday night fare.
mendyk
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mendyk,
User Rank: Light Sabre
4/7/2014 | 10:05:56 AM
Money matters
At some point -- and I'm sure you've thought about this -- the cost of delivering content to all these different devices using different means of connectivity has to factor into whether it makes sense to chase users with content. If the cost of multidimensional product delivery is a lower profit margin, then this makes less sense from the service provider side, sophistication of the end-user notwithstanding.
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