Casting further doubt on the future of pay-TV's six-year-old TV Everywhere (TVE) initiative, the normally bullish Adobe Digital Index indicates that adoption only stands at 13.6 percent of households.
In its quarterly Digital Video Benchmark reports, Adobe tends to focus on the increase in consumption by active TVE users. And true to form, that metric spiked 102 percent year-over-year in the third quarter. However, the company now acknowledges growth in users is slow, increasing only 8 percent year-over-year.
Two years ago, TVE usage penetration stood at 12.6 percent.
Another disturbing trend for TVE: The average number of ad starts per video was down 10 percent year-over-year in the third quarter.
"It's all-time high penetration, but it's also not the penetration that we need," Jeremy Helfand, VP of Adobe Primetime, told The Wall Street Journal.
Adobe cites the usual issues for slow adoption -- overall awareness of TVE, coupled with the daunting task of making users aware of apps and empowering them with the username/password-entering skills needed to access authenticated multiscreen services.
Not that such authentication is a problem for the major SVOD services, Netflix (NASDAQ: NFLX) and Hulu, which collectively are in about 40 percent of U.S. homes, according to Nielsen.
For his part, Helfand also noted the intricate nature of multiscreen rights, which typically don't get unlocked until program licensing deals between media companies and pay-TV operators come up for renewal.
"The affiliate arrangement between content providers and the pay-TV providers tend to be longer term contracts, so we see them cycling though," Helfand said. "As more of those contracts renew, we will see the digital rights associated with content be more favorable toward the TV Everywhere product."
For more:
- read this Adobe's Q3 Digital Video Report
- read this Wall Street Journal story
- read this Streaming Media report
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