Online video supplements viewing

Research from Nielsen suggests that most viewers appear to be using online video to supplement, rather than replace, traditional paid television services from satellite, cable or telco providers. Up to 40% of younger adults say they would consider replacing a traditional television subscription service with an online alternative, but this has not tended to translate into action. Asking them why they still watch television might be more illuminating.

Nearly three-quarters of over 30,000 online respondents worldwide said they paid a satellite, cable or telco provider to watch television programming. Just over one-quarter said they paid for an online video service, such as Hulu, Netflix or Amazon.

The number subscribing to an online video service was highest in North America, at 35% of respondents. In the Asia Pacific region it was 32%, followed by 21% in Latin America and just 11% in Europe.

Convenience was the main driver for most people, followed by being able to watch different programming to others in the household, and being able to catch up on multiple episodes at one time. Cost was a less important factor. However, 72% of respondents wanted more programming choice and 67% said that watching on computer or mobile device was not as good as watching on a bigger screen.

Over two-thirds of traditional television subscribers in the survey said they planned to maintain these subscriptions, but nearly one-third said they planned to cancel their service in favour of an online-only provider.

40% of those aged 15-20 who paid for a cable or satellite service said they would cancel in order to receive an online-only service. One might question how many in this age group actually pay for a television service in any case. Among those aged 21-34 the number considering cancelling was 38%, while for those aged 35-49 it was 30%.

The number was highest in the Asia Pacific region, where 44% of respondents indicated they were considering cancelling their television subscription for an online service. 24% reported this in Latin America, compared to 22% in North America and 17% in Europe.

So far, it seems, a fifth of those paying for satellite, cable or telco television in North America have yet to cancel their subscription. In fact, the top 10 pay-television services in North America actually increased their subscriber numbers by 349,000 in the last quarter of 2015, although they were down by 659,000 or 0.73% over the year.

Netflix has acquired 43.40 million subscribers in the United States since it launched online video service in 2007. Yet despite concerns about so-called ‘cord-cutting’, the informitv Multiscreen Index shows that the top six listed pay-television services in the United States actually increased their subscriber numbers between 2010 and 2016 from 74.34 million to 78.29 million.

Over the same period Netflix has gained 27.44 million paying subscribers outside the United States but there has been little evidence of a significant reduction in the number of people paying for traditional television services.

The Nielsen Global Video-on-Demand Survey polled over 30,000 online respondents in 61 countries in August and September 2015.

The findings in this survey are based on respondents with online access, with quotas for age and sex, weighted to be representative of internet users for each country.

As Nielsen notes, the usual caveats apply to online surveys, which reflect the self-selected, self-reported behavior of those with online access, rather than actual metered data representative of total populations.

The scale of the survey is impressive, but the results should be considered with caution.

Rather than asking whether people are likely to cancel their existing service in the future, it might be more illuminating to ask existing television subscribers why they have not cancelled their contract already.

The Nielsen Global Video-on-Demand Survey, Q3 2015 is available from the Nielsen web site.

www.nielsen.com

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