09 May 2012

TV is the Dominant Platform for Watching TV

The Nielsen Company has released its annual The Cross-Platform Report for 4Q11 (registration required) and it contains some interesting bits, none more interesting to me than this chart.

The thing that jumps out to me, is that for all the talk in the multichannel industry about TV Everywhere -- watching what you want, when you want and where you want -- the dominant way to watch video is on TV.

Even in the groups that watch the most video on phones and on computers, such viewing is a small fraction of the total. This is a developing area and viewing will increase as more people have video-enabled phones. Also, demographic forces are pretty clearly going to increase online viewing as these 65+ people in this chart become a smaller part of the mix ("die off" sounds a bit harsh) and are replaced by today's younger people who will probably continue to use online video they way they have been (in other words, more than today's older people do).

What one always wonders about trends is whether this will transform the industry or effectively obliterate it? In other words, is the impact "DVR on the TV business" or "computer on the typewriter business"?
Making TV more convenient to view with result in more viewing. Convenience adds to consumption. Robert Woodruff, Coca-Cola's president, expressed his goal of putting the drink "within an arm's reach of desire" in 1923. That worked out pretty well for increasing the consumption of Coca-Cola.

However, portable TV is not an entirely new concept. I remember fondly receiving this as a gift in my early days in the television business.

Sony FDL-22 handheld television (1998) for more info
In its day, it was a pretty exotic piece of kit, but eventually languished for all of the now-obvious practical reasons. We didn't want a separate device just for watching TV on the go.

The mobile part of TV Everywhere sure looks like added value to the multichannel subscription rather than a separate video subscription. Verizon V-Cast, MobiTV and Media Flo have all found that they are either out of the mobile video business or have morphed the sale or sales pitch to be an adjunct to the sale of a mobile data plan. We didn't want a separate subscription just for watching TV on the go.

If there is any company that knows the value of TV Everywhere it is Netflix, since it is on virtually every possible video-viewing platform, but look at the breakdown of its usage...
click here for the Nielsen blog post from which this chart came
For clarity, this is a chart of how many users use the platform for watching Netflix (or Hulu), not how much they watch on the platform, but it is pretty clear that iPad and mobile phone usage are pretty far down the list and fit better into the concept of special use cases than primary usage. As regards watching long form video on a computer, I think most everyone has enough experience with that experience to draw their own conclusion on the attractiveness and/or use cases versus watching video on a television.

TV is the dominant platform for watching TV and likely will be for a long time. TV Everywhere is well worth providing, but strictly added value to the core usage.

Now, if someone delivers a quality service to your mobile phone and then you can painlessly send it to your big TV in high quality (like via AirPlay using an Apple TV)...that's a whole different competitive dynamic.

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