There appears to be room enough for both traditional pay TV and OTT when consumers can get the right mix of both--with a dash of social interactivity thrown in as seasoning, an Ericsson (Nasdaq: ERIC) Consumer Insight Summary Report concludes. According to the report, "only 7 percent (of consumers) have canceled their TV packages since 2011."
The information, gathered by Ericsson ConsumerLab, came from interviews with 100,000 individuals in 40 countries and 15 "megacities." The report's two main conclusions--in addition to the fact that consumers are not rushing to cancel their pay-TV subscriptions--are that "social TV is exploding," with 62 percent of consumers using social media while they watch TV, and that "TV anytime and anywhere is finally a mass market service," as 60 percent of consumers watch on-demand weekly.
An interesting finding, considering the conflicting reports on the value/understanding of connected and smart TVs, is the report's conclusion that the home entertainment set-up is transforming from multiple screens into a "large main TV supplemented by a number of mobile devices that provide access to services from all over the home."
Consumers again pointed out the conflict between the price of pay-TV subscriptions versus the conclusion they "simply do not use most of their channels" and "would be happy to pay in order to watch exactly what they want, when they want."
Nevertheless, the report added, "many consumers are still willing to pay the high cost of cable in order to access a handful of their favorite channels and live events, and to get Internet access."
That Internet access could be used for subscription-based OTT services, which are perceived as reasonably priced and cheap compared to pay TV, the report continued. While subscribers, locked into pay-TV services for things like live sports programming, won't move strictly to OTT, they will consume more OTT content through their mobile devices, providing a "huge opportunity for OTT players but also for traditional TV providers," the report says.
Finally, the report said, consumers may not be cutting the pay-TV cord, but they are shaving off slivers. This is in turn changing the way consumers actually watch TV.
"Consumers are moving from a supply-based navigation that is set by TV schedules to an ideas-based navigation set by their own desires," the report concluded. "Choosing content has itself become an activity with people making playlists or surfing sites such as IMDb to plan their viewing schedule."
- check out the report
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