Is TV Everywhere Going Nowhere?
News Analysis Alan Breznick, Cable/Video Practice Leader, Light Reading 6/13/2013
WASHINGTON, D.C. -- The Cable Show -- Although pay-TV providers have been diving into the multi-screen video market for several years, TV Everywhere still appears to be nowhere in most customers' minds. Only 26 percent of U.S. consumers are now aware that their video service provider offers TV Everywhere services, according to the latest study conducted by Parks Associates. While this total is up notably from 18 percent a year ago, it means that nearly three-quarters of consumers still don't know they can get multi-screen video service. Speaking on a Cable Show panel this week, Brett Sappington, director of research for Parks Associates, blamed the low consumer awareness rate largely on the cautious, even lackluster marketing strategies of service providers. He said many providers "really didn't want to go to market until they knew that it was running. It was kind of a slow start for many." Sappington said many pay-TV providers also haven't done much to market their multi-screen offerings because they don't make any money from them. He noted that some pay TV executives, including one Dish Network executive, told him that if they were going to pay for a 30-second TV commercial, they preferred to promote a service that would produce revenue for the company. Further, Sappington said, some providers promoted TV Everywhere service only to those customers who seemed likely to pay extra fees for programming on multiple screens. Most multi-screen services were initially designed to stave off competition from such aggressive over-the-top (OTT) video providers as Netflix, he noted -- so most pay-TV providers are only now starting to consider the monetization of multi-screen video. But they're considering it seriously. "This is a building full of people asking how the hell am I going to make money on mobile screens," Sappington said. The Parks Associates study indicates that once video subscribers learn about their pay-TV provider's multi-screen fare, they often sign up for it. In the study, 15 percent of all consumers, or about 60 percent of those who are aware of the TV Everywhere service's availability, said they actually use it. That's up from 11 percent in early 2012. Sappington said TV Everywhere viewers are neither no more nor no less likely than regular cable subscribers to cut the video subscription cord. Somewhat surprisingly, he said, they also make about the same income as the average cable subscriber. But, Sappington noted, TV Everywhere users tend to be several years younger than other cable customers, are more likely to have kids and generally own more Web-connected devices. They are also much more likely to subscribe to premium services, spend more than average subscribers on their premium services and spend more time overall watching video content. "These are people that just love video," he said. "In essence, they are cable's best customers. They love video from every source, and one of the things cable provides have is a lot of content." In particular, Sappington advised cable operators to look at how much TV Everywhere subscribers watch on-demand programming. He argued that operators could use VoD on multiple screens to generate more revenue. "While TV Everywhere itself may not be monetized in some way, a lot of that [VoD] spending may be optimized" with multi-screen, he said. Speaking on the same panel, executives from LG Electronics, Cox Communications and Arris spoke about and demonstrated new IP video gateways for the home. They said that while headed gateways, which connect directly to TV sets like set-top boxes, are currently more popular, headless gateways, which are centralized, uber-boxes that don't connect to TVs, are the technology of the future. Ed Shrum, senior director of strategy architecture for Cox, said the MSO will start deploying headed gateways later this month. He said Cox aims to introduce headless gateways early next year. Kurt Hoppe, director of smart TV innovation and new business for LG Electronics, said the big CE manufacturer intends to offer the cable market IP gateways, mini set-top boxes and smart TVs. "We can certainly manufacture products in all different sizes and shapes, and we've been doing this in 100 different countries," he said. "So I think what we think is the ultimate vision is a smart TV connected to one of those video gateways." — Alan Breznick, Cable/Video Practice Leader, Light Reading
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