KPMG: Pay TV must change now or die

The new multi-tasking digital consumer is still loyal to television but wants more than what traditional pay TV services have to offer and may drift away to find it, revealed findings from KPMG's 2013 Digital Debate survey.

The survey of 9,000 people in nine countries concluded television "is no longer a single experience as 'digital multi-taskers' interact with tablets and smartphones while simultaneously watching television." Statistically, it added, 14 percent of U.S. respondents "now prefer to watch TV via their mobile or tablet," and that number is only expected to grow as "the next generation of consumers will seek a more mobile TV experience."

"Traditional media companies need to change or fail," wrote Paul Wissmann, partner and head of media and telecommunications for KPMG in the United States. "Media companies will have to make it clear now that they are meeting customer needs."

For the time being, Wissmann concluded, "traditional media is holding up well to the disruption," but "the impact can be dramatic in areas where over-the-top delivery is starting to make some inroads."

Right now, he added, multichannel video programming distributors (MVPDs) have been doing a pretty good job of stemming the tide of customers away from their services and onto OTT, but they've had help.

"To change from one pay TV provider to another is currently a hassle for consumers," Wissmann wrote. "The problem for over the top players is there is not that all-encompassing product that effectively replicates the standard cable or satellite package. But when that problem is solved, then the over-the-top players can truly compete with the traditional providers, making it harder to hold onto subscribers."

Also threatening the traditional pay TV model are content owners themselves, who could disrupt the market with direct-to-consumer plays, Wissmann added.

"Traditional media companies cannot wait for a silver bullet or sit by and wait for their competitors to come up with an answer," concluded David Elms, head of media for KPMG in the U.K. "[T]o really stay ahead in this market, the power lies with understanding what your consumers are looking for and giving it to them--before they even know they need it."

For more:
- KPMG offered this summary of its research

Industry Voice: Lowenstein's View: Rethinking business models for mobile and content

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