Monday, 6 November 2006

Olswang Convergence Consumer Survey 2006

The Olswang Convergence Consumer Survey 2006 was an online survey of over 1500 UK consumers, aged 13 to 55. The survey was conducted for Olswang by Entertainment Media Research Limited, during August and September 2006. It follows the inaugural Olswang Convergence Consumer Survey which was conducted in 2005.

UK survey reveals consumers are streaming and downloading audio-visual content in the comfort of their living room, but are not prepared to pay.

The Olswang Convergence Consumer Survey 2006 has revealed that rights holders and service providers are facing new challenges in the battle for consumer attention and control of the living room. In the digital age, consumers want choice and control but for providers, the biggest hurdle is to overcome consumers' unwillingness to pay for content.

Consumers are now demonstrating a clear preference for full-length feature films and TV programmes over shorter clips and trailers as their content of choice for the PC. Nearly 40% of UK consumers are already streaming or downloading audio-visual content onto computers at home and nearly half of these are doing so in the living room. Whilst this may suggest a potentially lucrative new market for rightsholders and service providers, the downside is that consumers appear unwilling to pay to receive content on their home PC, with 1 in 2 not prepared to pay anything extra for streamed/downloaded content and a further 40% not willing to pay more than £5 per month.

Content providers begin fight for control of the living room

Now in its second year, the independent survey of 1,500 13-55 year old UK consumers discovered that, although home computers are often used in the study or bedroom as a replacement television set, 49% of those consumers who are watching streamed or downloaded content are doing so on a computer in the living room, which is now by far the most popular location for this activity. In order to engage in the battle for dominance of the living room, companies need to adapt their services to take account of this behaviour.

The principal reason revealed by the Survey as to why the remaining consumers are not streaming or downloading content is because they are happy watching television "the way it is" and from a comfortable chair. These consumers still need to be educated that content which arrives on a computer is now compatible with this traditional style of "lean back" television. New devices which will allow consumers to shift content from the computer to the main television set after it has been downloaded or while it is being streamed, such as Apple's recently announced "iTV" device, should help to bridge this gap.

Consumers want control over their viewing

The Survey uncovered a behavioural shift in the way consumers watch programmes. The most popular reason for streaming and downloading is the control it gives consumers over what they watch and when. Amongst device owners, Sky+ is considered the second most important and desirable device after the mobile phone, showing the extent to which Sky+ users value the control it offers. In fact, 58% of Sky+ owners claim to watch an equal amount of live and recorded programming.

Consumers also appear attracted to the choice of content and viewing times offered by video on demand (VOD) services, such as those already provided by ntl/Telewest and Homechoice and shortly to be launched by BT. 38% of consumers, on top of the 12% who are already receiving VOD, state they are interested in receiving VOD on their television sets. Of these, 45% state that they are most likely to buy a VOD service from Sky, compared to 22% who would expect to buy it from a cable provider and only 4% who would expect to do so from a telco such as BT. This suggests that traditional suppliers of TV content remain well placed to capitalise on consumer demand.

However, while new technologies allow consumers control over what to watch and when, people are paying less attention to programmes, whether they are watching them on a TV or on a computer, which lies at the heart of the battle for consumer attention. Multi-tasking is becoming accepted behaviour. 46% of respondents are emailing and 43% surfing the net at the same time as watching television, and the incidence of multi-tasking is markedly higher amongst those whose computer is in the living room. Consumers are also taking advantage of the functionality offered by personal video recorders to skip through adverts, with 86% of Sky+ users claiming they forward past adverts all or most of the time when watching recorded programmes, obviously a concern for UK advertisers.

How can providers persuade consumers to pay?

The main obstacle for online audio-visual content providers is persuading consumers to pay, with half of all consumers surveyed saying they are not prepared to pay anything extra to receive TV programmes or movies on their home computers. A further 18% are not prepared to pay more than £2 per month for content and 22% are willing to pay only between £2 and £5.
However, a more positive message for service providers is that consumers' use of devices such as Sky+ to skip adverts does not mean that consumers necessarily expect to receive online audio-visual content without any adverts. A quarter of all respondents said they would prefer to receive online content for free with adverts included, compared to only 11% of respondents who would prefer to pay a small fee in order not to have adverts included.

Mobile TV remains unpopular

It was a major feature of the 2005 survey that 70% of respondents did not want to watch TV on a mobile phone. Despite the launch of a range of mobile TV services in the last 12 months and despite the mobile phone remaining respondents' favourite device, consumers remain uninterested in using their mobile phones to view audio-visual content.

This year's survey provides greater insight into why this is so. 90% of respondents have not yet streamed or downloaded any full length content, clips or trailers to their mobile phones and, of these, over 70% stated they have no future interest in this activity. Looking at the difference between computer and mobile use, the key to this appears to be that what people really want is full-length content, not clips or trailers – and that this full-form content is not really suited to mobile consumption, other than in special cases where content is short but complete in itself, such as music videos.

Mobile phone companies also face competition from usage of other portable devices, with 30% of consumers already using a portable DVD player, Sony PSP, iPod with video or other device to watch TV programmes or movies.

It is clear that consumers are beginning to experiment with all of the different device/content combinations now becoming available – but it is still too early to see who will be the real winners in this battle.

http://www.olswang.com/convergence/files/TheOlswangConvergenceConsumerSurvey2006.pdf

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