TiVo just released the 16th edition of its quarterly Video Trends Report, covering key topics across Pay-TV, VOD, PPV, OTT and TV. Here are some of the takeaways from the 42-page survey.
The State of Pay TV
The report found that Q4 of 2016 had the highest percentage of cord-cutters in a single quarter since TiVo began tracking them in the Q4 2015 survey. In Q4 2016, 83.0% of respondents had a pay-TV provider. Of the 17.0% without a pay-TV provider, 19.8% of this segment of respondents cut service in the last 12 months, which is an increase of 1.9% q/q and 2.3% y/y.
Top three reasons people were cutting the cord:
1. “Price / Too expensive” — 80.1%,
2. “I use an internet streaming service, such as Netflix, Hulu, Amazon Video, etc.” –48.3%
3. “I use an antenna to get the basic channels on my TV.” — 27.2%
The data demonstrates why over-the-top (OTT) services continue to play a major role in cord-cutting. Their low price point has become popular, igniting a sense of urgency for pay-TV providers to offer new “slimmer” pay-TV packages delivered in a streaming format. This is why it’s not uncommon to now see cable/satellite providers offering similar, slimmed down package options like DirecTV Now and Sling TV, both which launched in Q4 2016.
In addition, when respondents were asked if they plan to change pay-TV providers in the next six months, the results were as follows:
· 17.6% plan to CUT their pay-TV service, which is an increase of 2.0% q/q and y/y, 3.4% over two years, and 5.0% over three years — and at 7.6%, the percentage of respondents planning to cut in Q4 2016 is the highest recorded since the introduction of this question in Q4 2012. 6.8% plan to CHANGE to another pay-TV provider.
· 3.2% plan to SWITCH to an online service or app.
· 29.6% are on the fence, answering “MAYBE.”
· These figures total 47.2% of respondents — meaning just under half of respondents could potentially leave their current pay-TV provider in the next six months. This group of “at risk” respondents increased 2.3% q/q, and 2.5% y/y.
When asked what could persuade them to stay with their current providers, 63.7% of respondents called for a more flexible package structure, and 41.5% called for a more integrated video solution that would combine all TV providers like Netflix, Hulu, etc.
TV Viewing Habits
Out of those surveyed 84.7% watch live TV on a daily basis, 71.0% watch previously recorded/DVR’d content on a daily basis and 64.7% watch OTT/streaming shows on a daily basis, an increase of 3.6% q/q.
When it comes to viewing habits, TiVo believes that content discovery will be at the forefront of a successful TV provider. The study notes that in Q4 2016, 31.8% of respondents said they didn’t have ample time to view all their favorite programs. TiVo believes that predictive recommendations can assist viewers in finding something they like to watch as well as cut down on the time it takes to find something — which ultimately leaves more time to watch content, while potentially increasing the perceived value of their pay-TV service.
In Q4 2016, 63.8% of respondents said they use an SVOD service such as Netflix, Hulu, Amazon Prime, etc. Additionally, of respondents with pay-TV service, 91.1% also use one or more SVOD service(s). Positive trends for SVOD services include:
· Adoption of SVOD services as a whole increased slightly q/q, 8.4% y/y, 10.5% over two years and 18.5% over three years.
· Respondent selection of “Amazon Prime (free movies with Prime subscription)” increased slightly q/q, 6.7% y/y, 9.6% over two years and 14.7% over three years.
· Respondent selection of “Netflix” increased slightly q/q, 4.7% y/y, 6.4% over two years and 13.8% over three years.
The Q4 2016 survey show positive results across the board for both SVOD and TVOD providers. Both categories saw increases in overall adoption, daily/weekly viewership, and amount spent. The top five reasons given were:
· “Convenience” — 36.0%
· “Ability to watch certain TV shows and whole seasons” — 32.1%
· No commercials or ads” — 32.1%
· “It’s cheaper” — 29.2%
· “Ability to watch TV/movies on your computer” — 24.0%
Of those respondents who use an SVOD service, 81.2% were pleased with the ability to find something to watch, a percentage that experienced a slight increase y/y.
Several positive growth trends proved the importance of usability and viewer ability to easily find something to watch. For instance:
· “Auto-Play to the next episode (next show comes on automatically)” increased 2.2% q/q.
· “Recommendations of shows to watch that are personalized to you based on what you have previously watched on Netflix” increased 2.3% q/q.
· “All members of your household can create their own profile” increased 4.2% q/q.
· “Pre-made lists of shows just for you, such as ‘Because You Watched,’ ‘Kids Movies,’ etc.” increased 4.3% q/q.
Pay-TV Providers’ TV Everywhere (TVE) Offerings
Though OTT is steadily increasing in popularity so is Pay-TV providers’ TVE. Almost half (49.1%) of respondents are aware of their pay-TV provider’s app, which is an increase of 2.0% q/q and 9.1% y/y. Thirty percent of respondents access their pay-TV provider’s TVE app, another trend that saw positive growth with increases of 2.8% q/q and 9.4% y/y.
Sixty-one percent of respondents who use their pay-TV provider’s TVE app use it on a weekly basis, which is an increase of 3.1% q/q, 16.1% y/y. Among weekly users, a majority (24.8%) use it six to seven days a week.
TiVo’s Q4 2016 Video Trends Report is based on a survey of over 3,100 consumers.