A report by EY showed 44% of UK households think they get better value from streaming services than from any pay TV operators.
This is one of the key findings from “Zooming in on household viewing habits”, a follow-up deep-dive on the annual survey EY conducted last September, which covered 2,500 UK families. This message from the UK consumers was also corroborated by a separate, US-focused research by Deloitte, where nearly half of all pay TV subscribers said they were dissatisfied with their service, and 70% felt they were getting too little value for their money.
One of the key themes coming out of the deep-dive into the UK family’s media consumption habits is the ascendency of the consumption of content over the Internet, at the expense of pay TVs. Despite that cord-cutting has not yet hit the UK hard, 54% of all families are already spending more time on the Internet than in front of the traditional TV, including two-thirds of young users primarily watch content on streaming platforms.
“It’s no surprise the UK is becoming a nation of streamers, but our research shows just how enthusiastically households have embraced it. Over the next 12-18 months we will see the launch of new streaming services to further sate the UK’s appetite for content,” said Martyn Whistler, Global Lead Media and Entertainment Analyst at EY. “However, reports of the demise of traditional TV seem a little premature. Our research shows their popularity is undiminished, with viewers watching them more now than in previous years.”
Although this could spell even more bad news for the pay TV operators, when the consumers do watch broadcast TV, 51% of households mainly just watch the five traditional “free” channels (if you did not count the £150 TV licence as “pay”), up from 46% in 2017.
In general consumers are much more tolerant towards pay TV carrying ads than streaming services do. But, still, more consumers are also willing to pay for the content they like. For example, Netflix ranked number one on the table of apps by consumer spending, according to App Annie. And the Deloitte report showed that in the US, a consumer would subscribe to up to three on-demand streaming services at the same time. The willingness to pay has even extended to catch-up watching, especially to get rid of the ads, according to the report. 18% surveyed would be happy to pay more to stream ad-free catch-up TV, up from 16% in 2017.
Another trends that stood out in the report is the diversification of content consumption platforms and its problems. A third families stream video on multiple screens, while 62% of the 18-24-year olds do so. Meanwhile, a quarter of all households have found it hard to track the availability of their favourite content across different services, apps and platforms. This number went up to 39% among the 18-24-year olds, which should be more tech-savvy.
These trends combined can have some implications for how content is produced, distributed, and monetised. For example, if consumers will most likely binge watch content on streaming services (e.g. the average Netflix user would stream two hours a day), the idea of “episode”, which has worked on broadcast TV, will be less relevant. Or should a long series be released all at once on a streaming platform, or making it available episode by episode as the conventional TV broadcasting does? How should pay TV services improve not only its users’ account management, but also the content’s ID management, to provide more pleasant experience for cross-platform and cross-device users?
As Praveen Shankar, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland, put it: “Our survey demonstrates that audiences are struggling to keep track of their favourite content across various platforms and they are confused by the choices available to them. Technology, Media and Telecoms (TMT) companies need to move away from programme guides and big budget marketing and build artificial intelligence (AI) enabled recommendation engines to push content. This will improve user experience, reduce costs and maximise assets.”
On-demand video streaming has surely gained more impetus again in the last few days. CanalPlus has just launched its own streaming service Canal+ Séries, and Apple is widely expected to unveil a version of video on-demand service on 25 March at an event on its own campus.