TV Everywhere Fans Called No More Likely to Cut Cords Than Average Cable User
Cable subscribers who use TV Everywhere are no more likely to cut the cord than regular cable subscribers, said Brett Sappington, Parks Associates’ director-research, on a Tuesday panel at the NCTA show. TV Everywhere users have the same income level as average cable subscribers and the same gender, but they're slightly more likely to own more Internet-capable devices and slightly younger, he said.
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Customer awareness of TV Everywhere services has risen to 26 percent, from 18 percent at the start of 2012, Sappington said. He attributed the low awareness rates to different marketing strategies from TV Everywhere providers, saying many operators “really didn’t want to go to market until they knew that it was running. It was kind of a slow start for many.” Other operators, including one Dish Network executive, told him if they were going to pay for a 30-second commercial, they wanted to advertise a service that would bring revenue back to the company, Sappington said. Still others promoted the service only to those users they felt would pay extra for shows on their second screens.
Operators are only now beginning to consider the monetization of multiscreen capabilities, Sappington said, saying originally the services were designed as a defense against over-the-top providers like Netflix. “This is a building full of people asking how the hell am I going to make money on mobile screens,” he said. He said mobile is one of the biggest areas of growth for TV Everywhere services.
The average TV Everywhere user is “much more likely to subscribe to premium services,” Sappington said. They spend more than average subscribers on their premium services, and spend more time overall watching video content. “These are people that just love video. In essence they are cable’s best customers. They love video from every source, and one of the things cable provides is a lot of content,” he said. A lot of TV Everywhere providers have seen substantial spillover into VOD, he said, as consumers have more ways to pay for extra content. “While TV Everywhere itself may not be monetized in some way, a lot of that spending may be optimized” with TV Everywhere, he said.
Executives from LG, Cox Communications and ARRIS also demonstrated new headless gateways to deliver cable and other content to consumers regardless of placement near a TV or other device. While headed gateways, which must be placed near a TV and which have audio and video outputs, are currently more popular in the market, the executives said they consider headless gateways the technology of the future. Ed Shrum, Cox Communications senior director-strategic architecture, said his company will deploy headed gateways later this month, and hopes to deploy headless gateways at the start of 2013.
LG Electronics hopes to penetrate the cable market with offerings like mini set-top boxes and Smart TVs, said Kurt Hoppe, the company’s director-smart TV innovation. “LG, with our connected TV experience, and connected Blu-ray players, we've got four, going on five years’ experience bringing lots of different services as a service aggregator to a platform, and giving a good experience and good remote control,” he said. “We can certainly manufacture products in all different sizes and shapes, and we've been doing this in 100 different countries, so I think what we think is the ultimate vision is a Smart TV, connected to one of those video gateways that ARRIS was talking about. In the meantime, there are hundreds of millions of TVs out there that have been waiting for some kind of connectivity.”