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CONSUMERLAB
TV AND
MEDIA 2015The empowered TV and media consumer’s influence
An Ericsson Consumer Insight Report
September 2015
the voice of the consumer
Ericsson ConsumerLab has 20 years’ experience of studying
people’s behaviors and values, including the way they act and
think about ICT products and services. Ericsson ConsumerLab
provides unique insights on market and consumer trends.
Ericsson ConsumerLab gains its knowledge through a global
consumer research program based on interviews with
100,000 individuals each year, in more than 40 countries
and 15 megacities – statistically representing the views of
1.1 billion people. Both quantitative and qualitative methods are
used, and hundreds of hours are spent with consumers from
different cultures. To be close to the market and consumers,
Ericsson ConsumerLab has analysts in all of the regions
where Ericsson is present, which gives a thorough global
understanding of the ICT market and business models.
All reports can be found at:
www.ericsson.com/consumerlab
2  ERICSSON CONSUMERLAB TV AND MEDIA 2015
Contents
4 THE ROLE OF CONTENT
6 EVOLVING MEDIA HABITS
8 VIDEO ON THE GO
10 CONTENT DISCOVERY	
12 CORD-CUTTERS AND CORD-NEVERS	
14 NEW BUSINESS MODELS	
Qualitative
There were 30 in-depth interviews in Mexico City, Paris,
San Francisco and Stockholm. These respondents all have
multiple devices and a broadband internet connection at
home, and they watch on-demand content in a range
of locations.
On-device measurements
Around 14,500 Android smartphone users in South Korea,
the UK and the US (data collected by Nielsen), 5,400 iPhone
users and 6,575 Android users in the US were measured
(comScore mobile Metrix).
Quantitative
More than 20,000 online interviews were held with people
aged 16–59, and over 2,500 with consumers aged 60–69,
across 20 markets: Brazil, Canada, China, Colombia, France,
Germany, Greece, Ireland, Italy, Mexico, Portugal, Russia,
Spain, South Korea, Sweden, Taiwan, Turkey, UK, Ukraine
and the US. All respondents have a broadband internet
connection at home, and watch TV/video at least once
a week. Almost all use the internet on a daily basis. This
sample is representative of over 680 million people.
Base: 9 markets
(Used for showing trends)
Brazil, China, Germany, South Korea,
Spain, Sweden, Taiwan, UK, US
Base: 20 markets
Brazil, Canada, China, Colombia, France,
Germany, Greece, Ireland, Italy, Mexico,
Portugal, Russia, Spain, South Korea,
Sweden, Taiwan, Turkey, UK, Ukraine, US
Methodology
Qualitative and quantitative
Quantitative
ERICSSON CONSUMERLAB TV AND MEDIA 2015 3
Key Findings
The difficulty of finding content
> Half of consumers watching linear TV say they
can’t find anything to watch at least once a day.
As many as 62 percent of consumers aged
25–34 face this challenge on a daily basis
 Consumers feel that recommendation features
are simply not smart or personal enough
Millennials prefer the mobile screen
 Those aged 16–34 spend 53 percent of all
their video viewing time on a smartphone,
laptop or tablet
 Since 2012 the number of consumers across
all age groups who watch video on their
smartphones has increased by 71 percent. The
average time spent watching video on mobile
devices is up 3 hours a week compared to 2012
Binge viewing changes the game
Non-believers in traditional pay TV may eventually change their minds
 Bingeing, the watching of multiple episodes of TV
and video content in a row, has rapidly become
a key part of the TV and media experience
 For TV cord-nevers (consumers who have
never had a pay TV subscription) it is difficult
to understand the value as it is offered today.
Long binding times, inflexible packages and
high costs and advertising cause 50 percent to
believe they will not pay for it, even in the future
 This habit is prominent among
Subscription Video-on-demand (S-VOD)
users, where 87 percent binge view at least
once a week, compared to 74 percent of
non S-VOD users
Linear TV remains key
 The popularity of linear TV remains high, mainly
due to its access to premium viewing and live
content, like sports, and its social value
 Linear viewing is linked to age: 82 percent
of 60–69 year olds say they watch linear
TV on a daily basis, while only 60 percent
of millennials (those aged 16–34) do so
 However, 22 percent of cord-nevers are already
paying for over-the-top (OTT) content services,
indicating a willingness to pay for subscription
TV, albeit with a different bundle approach
Streamed on-demand content is soaring
 Over 50 percent of consumers state that they
watch streamed on-demand video content at
least once a day, up from 30 percent in 2010
 Today, people estimate that they spend 6 hours
a week watching streamed TV series, programs
and movies on-demand. This has more than
doubled since 2011, when weekly viewing
was estimated to be 2.9 hours a week
50%
Content viewing is migrating
TV series and movies make up roughly half of
consumers’ total viewing time.
In 2011, people estimated that they spent 2.9 hours
per week watching streamed TV series, programs and
movies. Now it is 6 hours per week – the viewing has
more than doubled (Figure 1).
Emerging content categories are rapidly becoming
mainstream. The average time spent watching
e-sports is 46 minutes per week, while educational or
instruction videos show even higher usage, averaging
73 minutes per week (Figure 2).
Live sports have the most significant gender
differences. On average, men spend over three hours
a week watching it, while women only spend an hour.
Instead, women spend more time watching TV series,
other TV programs and recorded content.
4  ERICSSON CONSUMERLAB TV AND MEDIA 2015
THE ROLE OF CONTENT
Figure 2: Average number of self-reported weekly hours
of active TV/video viewing by gender
TV series according to a fixed TV schedule
Movies according to a fixed TV schedule
Other TV programs according to a fixed TV schedule
Streamed on-demand TV series
Recorded movies, TV series and other TV shows
Streamed on-demand movies
Live news
Other
Streamed on-demand other TV programs
Educational or instruction videos
Live sports
Live events
e-sport
4.8
3.9
3.0
3.0
3.0
2.3
2.3
1.9
1.3
1.1
1.0
0.7
0.4
4.0
4.3
2.8
2.5
2.9
2.5
2.6
1.8
1.3
1.3
3.1
1.2
1.1
Female Male
Source: Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
Figure 1: The increase in watching on-demand
TV series and movies
2.9 hours/week
6.0 hours/week
2011 2015
Streamed
on-demand
movies
Streamed
on-demand
movies
Streamed
on-demand
TV series and
programs
Streamed
on-demand
TV series
Streamed
on-demand
TV programs
121%
90%
Source: Ericsson ConsumerLab, TV and Media 2011 and 2015
Base: At least weekly viewers of video/TV with broadband at home, aged 16–59
Growing importance of user generated content
One in three consumers thinks it is very important to
be able to watch user generated content (UGC) on
their TV at home – an increase of nine percent
over one year.
The growing importance of educational or instructional
videos tends to emanate from UGC-rich platforms
like YouTube.
Even though the platform offers more than just UGC
content, the staggering growth of YouTube viewing
could be used as a clear indication of the growing
importance of UGC, as portrayed in Figure 3.
Bingeing content
The growing habit of binge watching has taken off
with the explosion of on-demand viewing.
Many on-demand services already have the ability
to play multiple TV series episodes with little or no
interaction, in some cases going as far as skipping
the recap and shortening the end credits to create
a more convenient experience.
Bingeing is rapidly becoming a preferred practice,
with 87 percent of S-VOD users bingeing at least
once a week, compared to 74 percent of non S-VOD
users (Figure 4). When exposed to simple and
reasonably priced bingeing capabilities, consumers
are quick to adopt it.
Over 50 percent of the studied consumers binge
watch at least once a day, and only 5 percent
never binge view.
ERICSSON CONSUMERLAB TV AND MEDIA 2015  5
Figure 4: Frequency of watching several TV series, other TV
programs or UGC episodes in a row
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
Binge view at least once
a fortnight
93%
81%
Binge view at least once
a week
87%
74%
Binge view at least once
a day
60%
47%
“My wife fixed our iPad and our
dishwasher by watching YouTube
instruction videos. If a nuclear reactor
started leaking, she would go to
YouTube and then volunteer to fix it.”
Simon, 44 years old, US
Figure 3: Percentage of consumers watching
YouTube with different frequency
More than three hours a day
At least daily
At least weekly
Less than weekly
Never
2011
2015
13
6
3
8
24
33 34
32 28
19
Source: Ericsson ConsumerLab, TV and Media studies, 2011 and 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 9 markets
S-VOD users Non S-VOD users
This year, just as last year, as many consumers say
they watch streamed on-demand video and TV at
least once a week, as who watch scheduled linear
TV. When looking at daily viewing, linear TV is still
dominating, while slightly over 50 percent watch
streamed on-demand video and TV (Figure 5).
These changing habits are linked to the proliferation
of connected TV screens, where consumers can
easily and conveniently access their on-demand
content. S-VOD users (that is, those paying for
at least one S-VOD service) have a significantly
higher penetration of smart TVs and connected,
video-enabled devices. 86 percent of S-VOD users
have and use a smart or internet connected TV,
compared to 64 percent of non S-VOD users.
Today, every third hour spent watching TV and
video is via video on-demand (VOD).
Almost 8 out of 10 teenagers say they watch
on-demand TV and video daily, but among
60–69 year olds, less than 3 out of 10 do so.
6  ERICSSON CONSUMERLAB TV AND MEDIA 2015
EVOLVING MEDIA HABITS
Figure 6: Percentage of consumers
that have and use each device
S-VOD users Non S-VOD users
TV with access to internet content
Game consoles (Wii, Xbox, PlayStation)
Google Chromecast
Other unit for online TV/video
access on the TV
Apple TV
75
51
23
19
17
47
30
10
8
6
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
Figure 5: Percentage of people watching different media
types at least once per day
Scheduled linear TV
Recorded linear TV
Streamed on-demand video
(YouTube, short video clips,
movies, TV series and programs)
0
2010 2011 2012 2013 2014 2015
25
50
75
100
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home, aged 16–59,
in Brazil*, China, Germany, Spain, South Korea*, Sweden,Taiwan, UK, US, *excluded
in 2010 figures [Showing: use once per day or more, 3 years moving average ¼, ½, ¼]
A decrease in watching scheduled TV
has been replaced by an increase in
streamed on-demand viewing
Pirate file sharing
2
1
The S-VOD effect is strong
The growth of on-demand viewing can be attributed to
easy-to-use and competitively priced or free services,
such as Netflix and YouTube. Among the US population
studied, as many as 52 percent say they use Netflix
at least once a week, and 27 percent use it daily
(Figure 7).
YouTube boasts higher penetration, but considering
that Netflix is a paid-for service, its performance
is even more impressive. When it comes to daily
habits, the other top five US on-demand services
only manage to capture a fraction of what Netflix and
YouTube gather on a weekly frequency. Netflix clearly
stands out with its significant ratio of daily viewing.
Linear TV remains key for many households
The perceived value of scheduled linear TV remains
high, mainly because of its premium content, ease of
viewing and social aspects. Linear TV often acts as
the ‘household campfire’ in a social respect, as well
as enabling the viewing of live content, such as
live sports.
The different viewing habits between age groups is
significant: 60 percent of millennials watch linear TV on
a daily basis, compared to 82 percent of 60–69 year
olds. This is a clear indication that linear TV will have to
continue to reinvent itself in order to remain relevant to
the younger population.
ERICSSON CONSUMERLAB TV AND MEDIA 2015 7
Figure 7: Percentage of people using each on-demand
service, on a daily vs. weekly basis, in the US
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in the US
HBO Go/HBO Now
13
5
ABC.com
12
4
Apple iTunes
9
4
Xfinity on-demand
9
5
Crackle
9
1
Vevo
8
3
Twitch
6
3
Vudu
5
2
FiOS on-demand
3
2
Pirate streaming
1
2
U-verse on-demand
6
4
Amazon Prime
6
19
Hulu
8
19
Netflix
27
52
YouTube
41
71
At least daily At least weekly
8  ERICSSON CONSUMERLAB TV AND MEDIA 2015
VIDEO ON THE GO
Millennials prefer the mobile screen
TV and video content is increasingly being accessed
via smartphones. In fact, since 2012 there has been
a 71 percent increase in the number of consumers
who watch video on their smartphones. When taking
tablets and laptops into consideration as well, almost
two thirds of the time spent watching TV and video
among teenagers is on a mobile device.
However, watching video on mobile devices is not
limited to the youth. In the US, 86 percent of
smartphone users watch video content on their phones.
The reach of TV and video content on smartphones has
increased significantly over the past few years, and two
out of ten consumers regularly watch linear TV on
their smartphones.
Smartphone viewing continues to be driven by short
video content, with 33 percent watching UGC, but
S-VOD services are creating an impact too. One in five
watch longer on-demand content, such as TV series
and movies, on their smartphones.
All in all, the average time spent watching TV and
video on mobile devices, including tablets and laptops,
has increased by three hours a week over the past
three years.
Figure 8: Percentage of consumers who watch
each content type on their smartphone
Video made by other consumers
Downloaded content
Live news
Streamed on-demand movies
Streamed on-demand TV series
Recorded content
Live sports
Scheduled TV series
Scheduled TV movies
Live events
Streamed, on-demand and
other TV programs
Scheduled other TV programs
33
11
9
8
8
7
6
6
6
5
4
4
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
71%
increase in the number of
consumers that watch video on
their smartphones since 2012
ERICSSON CONSUMERLAB TV AND MEDIA 2015  9
Tablets preferred for longer content
Tablets and smartphones are used equally for
watching short video content, but tablets are
preferred for watching longer content. In the US,
tablets have 588 average viewing minutes of
Netflix per user, compared to 252 minutes for the
smartphone (Figure 10).
Wi-Fi makes up the majority of mobile viewing
Even though Wi-Fi caters for a significant part of TV
and video data traffic, in some markets, like the US,
and to some extent also South Korea, mobile data has
taken a significant part of the viewing consumption.
In the US, cellular data usage makes up almost
one third of the total data consumption for TV and
video. However, this is dependent on technology.
When 3G and 4G users are compared, the latter use
significantly more data on TV and video. In the US,
4G users spend 2.5 times the amount of data on their
TV and video viewing than 3G users. In the UK it is three
times as much and in South Korea four times as much.
Since 37 percent of consumers think the cost of
mobile data away from the home is limiting their mobile
viewing, continued growth will be dependent on the
availability of services that enable cost-efficient mobile
viewing, for example through bundling mobile data and
video services.
Figure 11: Measured proportion of smartphone usage of
Wi-Fi vs. mobile broadband for TV and video apps
Figure 10: Measured monthly average minutes per visitor
for on-demand and streaming services
Source: Ericsson ConsumerLab, TV and Media, 2015 study
[comScore, MobileMetrix, Jan 2015]
Base: Android and iOS users in the US accessing
Netflix orYouTube on their smartphone or tablet respectively
Source: Ericsson ConsumerLab, TV and Media, 2015 study
[Nielsen on-device metering data]
Base: Android smartphone users in the US,
UK and South Korea accessing video content
Wi-Fi data consumption Mobile broadband consumption
Smartphone Tablet
UK
South Korea
US
12%88%
80%
71%
20%
29%
Figure 9: Share of total TV time by age group, measured on respective device
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets
Smartphone, tablet,
and laptop
Smartphone,
tablet, and laptop
TV screen
and desktop
TV screen
and desktop
0%
16-19 20-24 25-34 35-44 45-59
25%
50%
75%
100%
Age
TV screen Laptop screen Tablet screen
Desktop screen Smartphone screen
YouTube
Netflix
202
273
252
588
10  ERICSSON CONSUMERLAB TV AND MEDIA 2015
CONTENT DISCOVERY
The decision-making process
The growing range of available TV and video services
is giving consumers a plethora of options to choose
between. The final decision depends on the location,
the device at hand, the available services and the
available content.
The difficulties in finding content
Half of consumers that watch linear TV say they
can’t find anything to watch on a daily basis. Among
consumers aged 25–34, it is an even greater challenge,
with as many as 62 percent saying they face this.
When consumers can’t find anything to watch and
recommendation engines fail to help, consumers
simply ‘default’. Defaulting is when consumers give
up and resort to, or settle for, a viewing habit they
are familiar with, despite having had other viewing
ambitions. Defaulting indicates that the service does
not cater to the consumer’s needs.
Personal information and the service experience
Consumers are open to providing personal data in
order to get a better service experience. 31 percent
of consumers would like recommendations based on
their own viewing habits and demography.
Sharing personal information differs between
generations, with millennials being the most
comfortable with data sharing. There is a high level
of trust: one in two consumers who have a TV service
provider, trusts that their provider will handle data
securely and responsibly.
Figure 12: The different decision-making processes
when choosing TV or video content to view
More
active and
intentional
process
The device used influences the viewing choice
 Viewing linear TV creates continued random channel surfing
 Being on-the-go with only the smartphone at hand drives
YouTube viewing
Device
governed
Consumer content preference influences viewing choice
 What series should I watch? What service should I subscribe to?
 Pre-defined idea about content, drives the consumer to a specific
device and service where the content can be accessed
Content
governed
The service used influences the viewing choice
 Using an on-demand service drives binge watching, and the
refined search for the perfect content for the moment
Service
governed
The situation influences the viewing choice
 What options are available? What can I watch? What should I pay for?
 Situation  devices available  possible services  accessible content
Situational
Source: Ericsson ConsumerLab, TV and Media, 2015
More
contextually
influenced
process
50%
of consumers who watch linear
TV say they can’t find anything to
watch on a daily basis
ERICSSON CONSUMERLAB TV AND MEDIA 2015  11
Searching for serendipity
Traditional linear TV has a distinct element of
serendipity: discovery through happy coincidence
when flicking between channels. In traditional
linear TV, it is common for people to accidently find
programs they didn’t know about, but are interested by.
In the on-demand environment, consumers often feel
they already know what is available in the service, and
wish to be positively surprised.
Serendipity is however possible for on-demand
services. It can be created, for example, by the
interplay between multiple services.
This interplay is evident in the current practice of
linked viewing, where friends and family send links
to interesting content through social media, YouTube
recommendations that engage the viewer, and the
promotion of new title releases. There will be a distinct
need for on-demand platforms to pleasantly surprise
consumers all the time.
Discovering and remembering content
Content discovery for linear as well as for on-demand
viewing is a challenge for consumers. They feel that
recommendation features are not smart or personal
enough: they do not surprise or inspire.
The challenge with receiving numerous suggestions
and recommendations throughout the day is
remembering what was worth watching. Coping
mechanisms to aid memory include writing lists or
photographing title art.
Once in front of theTV, 40 percent of consumers still turn
to the TV guide, of which only 29 percent are satisfied
with. The consumers’ appetite for an inspiring content
discovery process is not yet met.
Figure 13: Percentage of consumers interested in different recommendation features for content and TV services
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets
Personalized TV service offering based on own viewing habits
Personalized content recommendation based
on own ratings of previously viewed content
Personalized content recommendation based on own viewing habits,
age, gender and zip code
Content recommendations that are not based on any personal information
32
32
31
22
“If people who are into shows post ‘oh my
God this episode is crazy’, I trust them.”
Melinda, 28 years old, US
12  ERICSSON CONSUMERLAB TV AND MEDIA 2015
CORD-CUTTERS AND
CORD-NEVERS
Catering for consumer needs
Technological innovations and new services allow
consumers to migrate their viewing to multiple
platforms. Easy-to-use OTT services for both VOD
and linear TV give consumers more confidence to
move parts or all of their viewing from traditional TV
services to OTT services.
One in four consumers studied has cut or shaved
their traditional TV service in the past year. This has
not changed compared to 2014. 47 percent of these
consumers reduced or eliminated it for cost-related
reasons, and 33 percent didn’t believe they were
watching enough TV to justify the cost. This indicates
that OTT services are perceived to provide better value
for money, as can be seen in Figure 14.
Traditional linear TV vs. on-demand services
As can be seen in the US data portrayed in Figure 15,
there is a significant difference in the Net Promoter
Score (NPS) between traditional linear TV services,
and on-demand services. The former scores only
10 points, whereas the latter scores 36. The
difference is even higher, with a 72 point difference
between the highest scoring on-demand service
and the lowest scoring traditional linear TV service
in the US.
Interestingly, low scoring linear TV service providers
rate significantly better on their on-demand services
than on their traditional services.
Figure 14 highlights what service providers do well
(reinforce), and where consumers feel they can improve
(fix). For traditional linear TV services, only video quality
ends up under the ‘reinforce’ segment, and both price
and availability of content need to be addressed.
Meanwhile, for on-demand services, price and available
content are strong points, with no weak points in any
areas. The NPS results are therefore unsurprising.
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
Figure 14: Consumer evaluation of content providers
Derived relative importance
Averagesatisfaction
Traditional linear TV providers
On-demand services
Maintain
Aspects that satisfy
the consumer and should
continue to be supported
Less important aspects
that need to be monitored
in case they increase
in importance
Monitor
Video quality
Video quality
Mobility
Mobility
Relevant content
Relevant content
Price
Price
Recommendation function
Recommendation function
Highly important aspects
to the experience, and are
the most satisfactory
Reinforce
Highly important
aspects that are not
satisfactory and need
immediate improvement
Fix
ERICSSON CONSUMERLAB TV AND MEDIA 2015 13
Converting cord-nevers to pay TV
Cord-nevers – consumers who have never paid for
managed TV services – already know how to find
content. These consumers struggle to understand
the value behind traditional linear TV, especially with
inflexible packages, long contracts, lots of advertising,
and high costs. Half of these consumers believe they
will never pay for a managed TV service, even in
the future.
However, 22 percent of these consumers are already
paying for TV and video in the form of OTT services.
This indicates a willingness to pay for subscription TV,
albeit with a different approach. In order to meet these
consumers’ needs, a pay TV service with a clear value
needs to be provided.
Cord-nevers consume less
Those classed as cord-nevers watch less TV and
video content in general. They spend less time viewing
broadcast TV and downloaded content, and stream
less VOD (Figure 16). The majority of the time these
consumers spend watching TV and video content is
taken up by movies, series and other programs on
scheduled broadcast TV. For these consumers, the
focus is not on getting more content to consume, but
rather having the means of accessing quality content
when they have time to spend watching TV and video.
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets
Figure 16: Average number of hours (per week) of active TV/video viewing,
split by age and whether they pay for managed TV (over the last 12 months)
Millennials (16-34) Older (35-59)
Corders – increased
Managed TV subscribers who have increased their spending
Corders – unchanged
Managed TV subscribers who have not changed their spending
Cord-nevers
Those who have never paid for managed TV
Cord-shavers last year
Managed TV subscribers who have decreased their spending
Cord-cutters last year
Those who once paid for managed TV but eliminated their spending
36.1
33.3
33.0
29.1
25.7
23.1
34.0
29.5
28.1
25.1
Figure 15: Likelihood to recommend each type of TV/video service
to a friend, family member or colleague, amongst those who use it (US market)
Promotor Neutrals Detractor Don’t know
Traditional linear TV services
On-demand TV/video services
38%
50%
33% 27%
34% 14%
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in the US
NPS
NPS10%
36%
2%
2%
14  ERICSSON CONSUMERLAB TV AND MEDIA 2015
NEW BUSINESS
MODELS
In search of a new experience
The emergence of today’s demanding consumers
puts new requirements and expectations on the TV
and media experience. There are three specific areas
that influence a consumer’s service experience: great
content; flexibility; and a high quality overall experience.
The desire for quality content, such as original
productions, new releases and sports is not new. It
is sustained by significantly higher interest and
willingness to pay than for other content types.
50 percent of consumers are very interested in
getting the latest theatrical releases direct to TV.
Subscription-based OTT services already offer the
ability to ‘hop-on hop-off’ services without any binding
times. 78 percent say they have never done this, but
they appreciate the opportunity.
Another highly valued ability is accessing content
anytime and anywhere, something 42 percent feel is
very important.
Consumers also wish for a TV/video bundle with
unlimited mobile data, allowing them to watch content
on the go, without the risk of running out of data. This
is very important to more than one third of consumers.
To aggregate content on top of bundling broadband,
data plans and video would make for a seamless
service experience. 78 percent of consumers would
prefer to get their TV, mobile and internet service from
the same provider.
Overall, supporting these three areas will be crucial
when creating the 21st century TV and media offering,
and bringing it to consumers.
Changing attitudes and acceptance of advertising
Consumers understand that advertising is needed to
finance the production of premium content. However,
they feel they are shown meaningless advertising.
Over half of consumers say they switch channels to
avoid advertising, while 43 percent say that they leave
to do something else while adverts are shown.
OTT services such as Netflix and Amazon Prime
exclude advertising altogether, creating new
expectations of what amount of advertising is
reasonable for on-demand services.
Advertising at the beginning of playback, such as
withYouTube, is most appreciated when watching
online, as the ads rarely interrupt the clip once it has
started to play. The online environment is ideal for less
intrusive ads, tailored to their audience. 40 percent
of consumers state that they would be interested in
customizing the ads they see by preference and
rating, which would provide a more personalized
advertising experience.
However, for now, consumers continue to avoid
advertising on traditional linear TV.
ERICSSON CONSUMERLAB TV AND MEDIA 2015  15
Entering a world of entertainment
The traditional TV and media offering, with linear
channels as the main product and all other features
complementary, is challenged by consumers.
Consumers now want a world of entertainment at
their fingertips. Offerings should include a range of
added services, such as linear channels, catch-up,
VOD capabilities and more, all constructed in a
seamless way.
46 percent of consumers show high interest in a
service that offers such an integrated experience,
together with the ability to view content on any
device (Figure 18).
Figure 17: Percentage of consumers who adopt
coping mechanisms while adverts play
Figure 18: Percentage of consumers interested in a TV media
offering that combines linear channels, on-demand selections
and cross-device access, all in one monthly bill
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59, in 20 markets
Source: Ericsson ConsumerLab, TV and Media, 2015
Base: At least weekly viewers of video/TV with broadband at home,
aged 16–59 in 20 markets
Change the channel in order to watch something else
Leave the TV to do something else
Browse the internet on the phone/tablet in front of the TV
Use social media on phone/tablet in front of the TV
Record the show, TV series, or movie in order to be able
to skip/fast foward
Watch the show, TV series, or movie through illegal
streaming or downloading
Avoid TV channels with advertising completely or watch
channels that don’t have advertising
No, I always watch TV and video ads
and commercials
Other strategy in order to not watch
TV and video ads
Use an ad-blocker
Only use services with little/no ads
52
43
34
31
30
20
12
12
10
8
6
Very interested
6
5
4
3
2
Not interested at all
22
24
23
11
7
4
3
7
would like to
influence ads to
show products
and areas they
are interested in
40%
1
EAB-15:030587 Uen
© Ericsson AB 2015
Ericsson
SE-126 25 Stockholm, Sweden
Telephone +46 10 719 00 00
www.ericsson.com
The content of this document is subject to revision without
notice due to continued progress in methodology, design and
manufacturing. Ericsson shall have no liability for any error or
damage of any kind resulting from the use of this document.
Ericsson is the driving force behind the Networked Society – a world leader in
communications technology and services. We are in a uniquely strong position to
understand how the worlds of media and telecoms are converging. Our heritage in TV
and media spans more than 25 years of cutting-edge innovation, enabling many of the
milestone shifts.
Our services, software and infrastructure – especially in mobility, broadband and
the cloud – are enabling the telecom industry and other sectors to do better business,
increase efficiency, improve the user experience and capture new opportunities.
With approximately 115,000 professionals and customers in 180 countries, we combine
global scale with technology and services leadership. We support networks that
connect more than 2.5 billion subscribers. Forty percent of the world’s mobile traffic
is carried over Ericsson networks. And our investments in research and development
ensure that our solutions – and our customers – stay in front.
Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales
in 2014 were SEK 228.0 billion (USD 33.1 billion). Ericsson is listed on NASDAQ OMX
stock exchange in Stockholm and the NASDAQ in New York.

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Ericsson consumer lab-tv-media-2015

  • 1. CONSUMERLAB TV AND MEDIA 2015The empowered TV and media consumer’s influence An Ericsson Consumer Insight Report September 2015
  • 2. the voice of the consumer Ericsson ConsumerLab has 20 years’ experience of studying people’s behaviors and values, including the way they act and think about ICT products and services. Ericsson ConsumerLab provides unique insights on market and consumer trends. Ericsson ConsumerLab gains its knowledge through a global consumer research program based on interviews with 100,000 individuals each year, in more than 40 countries and 15 megacities – statistically representing the views of 1.1 billion people. Both quantitative and qualitative methods are used, and hundreds of hours are spent with consumers from different cultures. To be close to the market and consumers, Ericsson ConsumerLab has analysts in all of the regions where Ericsson is present, which gives a thorough global understanding of the ICT market and business models. All reports can be found at: www.ericsson.com/consumerlab 2  ERICSSON CONSUMERLAB TV AND MEDIA 2015 Contents 4 THE ROLE OF CONTENT 6 EVOLVING MEDIA HABITS 8 VIDEO ON THE GO 10 CONTENT DISCOVERY 12 CORD-CUTTERS AND CORD-NEVERS 14 NEW BUSINESS MODELS Qualitative There were 30 in-depth interviews in Mexico City, Paris, San Francisco and Stockholm. These respondents all have multiple devices and a broadband internet connection at home, and they watch on-demand content in a range of locations. On-device measurements Around 14,500 Android smartphone users in South Korea, the UK and the US (data collected by Nielsen), 5,400 iPhone users and 6,575 Android users in the US were measured (comScore mobile Metrix). Quantitative More than 20,000 online interviews were held with people aged 16–59, and over 2,500 with consumers aged 60–69, across 20 markets: Brazil, Canada, China, Colombia, France, Germany, Greece, Ireland, Italy, Mexico, Portugal, Russia, Spain, South Korea, Sweden, Taiwan, Turkey, UK, Ukraine and the US. All respondents have a broadband internet connection at home, and watch TV/video at least once a week. Almost all use the internet on a daily basis. This sample is representative of over 680 million people. Base: 9 markets (Used for showing trends) Brazil, China, Germany, South Korea, Spain, Sweden, Taiwan, UK, US Base: 20 markets Brazil, Canada, China, Colombia, France, Germany, Greece, Ireland, Italy, Mexico, Portugal, Russia, Spain, South Korea, Sweden, Taiwan, Turkey, UK, Ukraine, US Methodology Qualitative and quantitative Quantitative
  • 3. ERICSSON CONSUMERLAB TV AND MEDIA 2015 3 Key Findings The difficulty of finding content > Half of consumers watching linear TV say they can’t find anything to watch at least once a day. As many as 62 percent of consumers aged 25–34 face this challenge on a daily basis Consumers feel that recommendation features are simply not smart or personal enough Millennials prefer the mobile screen Those aged 16–34 spend 53 percent of all their video viewing time on a smartphone, laptop or tablet Since 2012 the number of consumers across all age groups who watch video on their smartphones has increased by 71 percent. The average time spent watching video on mobile devices is up 3 hours a week compared to 2012 Binge viewing changes the game Non-believers in traditional pay TV may eventually change their minds Bingeing, the watching of multiple episodes of TV and video content in a row, has rapidly become a key part of the TV and media experience For TV cord-nevers (consumers who have never had a pay TV subscription) it is difficult to understand the value as it is offered today. Long binding times, inflexible packages and high costs and advertising cause 50 percent to believe they will not pay for it, even in the future This habit is prominent among Subscription Video-on-demand (S-VOD) users, where 87 percent binge view at least once a week, compared to 74 percent of non S-VOD users Linear TV remains key The popularity of linear TV remains high, mainly due to its access to premium viewing and live content, like sports, and its social value Linear viewing is linked to age: 82 percent of 60–69 year olds say they watch linear TV on a daily basis, while only 60 percent of millennials (those aged 16–34) do so However, 22 percent of cord-nevers are already paying for over-the-top (OTT) content services, indicating a willingness to pay for subscription TV, albeit with a different bundle approach Streamed on-demand content is soaring Over 50 percent of consumers state that they watch streamed on-demand video content at least once a day, up from 30 percent in 2010 Today, people estimate that they spend 6 hours a week watching streamed TV series, programs and movies on-demand. This has more than doubled since 2011, when weekly viewing was estimated to be 2.9 hours a week 50%
  • 4. Content viewing is migrating TV series and movies make up roughly half of consumers’ total viewing time. In 2011, people estimated that they spent 2.9 hours per week watching streamed TV series, programs and movies. Now it is 6 hours per week – the viewing has more than doubled (Figure 1). Emerging content categories are rapidly becoming mainstream. The average time spent watching e-sports is 46 minutes per week, while educational or instruction videos show even higher usage, averaging 73 minutes per week (Figure 2). Live sports have the most significant gender differences. On average, men spend over three hours a week watching it, while women only spend an hour. Instead, women spend more time watching TV series, other TV programs and recorded content. 4  ERICSSON CONSUMERLAB TV AND MEDIA 2015 THE ROLE OF CONTENT Figure 2: Average number of self-reported weekly hours of active TV/video viewing by gender TV series according to a fixed TV schedule Movies according to a fixed TV schedule Other TV programs according to a fixed TV schedule Streamed on-demand TV series Recorded movies, TV series and other TV shows Streamed on-demand movies Live news Other Streamed on-demand other TV programs Educational or instruction videos Live sports Live events e-sport 4.8 3.9 3.0 3.0 3.0 2.3 2.3 1.9 1.3 1.1 1.0 0.7 0.4 4.0 4.3 2.8 2.5 2.9 2.5 2.6 1.8 1.3 1.3 3.1 1.2 1.1 Female Male Source: Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Figure 1: The increase in watching on-demand TV series and movies 2.9 hours/week 6.0 hours/week 2011 2015 Streamed on-demand movies Streamed on-demand movies Streamed on-demand TV series and programs Streamed on-demand TV series Streamed on-demand TV programs 121% 90% Source: Ericsson ConsumerLab, TV and Media 2011 and 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59
  • 5. Growing importance of user generated content One in three consumers thinks it is very important to be able to watch user generated content (UGC) on their TV at home – an increase of nine percent over one year. The growing importance of educational or instructional videos tends to emanate from UGC-rich platforms like YouTube. Even though the platform offers more than just UGC content, the staggering growth of YouTube viewing could be used as a clear indication of the growing importance of UGC, as portrayed in Figure 3. Bingeing content The growing habit of binge watching has taken off with the explosion of on-demand viewing. Many on-demand services already have the ability to play multiple TV series episodes with little or no interaction, in some cases going as far as skipping the recap and shortening the end credits to create a more convenient experience. Bingeing is rapidly becoming a preferred practice, with 87 percent of S-VOD users bingeing at least once a week, compared to 74 percent of non S-VOD users (Figure 4). When exposed to simple and reasonably priced bingeing capabilities, consumers are quick to adopt it. Over 50 percent of the studied consumers binge watch at least once a day, and only 5 percent never binge view. ERICSSON CONSUMERLAB TV AND MEDIA 2015  5 Figure 4: Frequency of watching several TV series, other TV programs or UGC episodes in a row Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Binge view at least once a fortnight 93% 81% Binge view at least once a week 87% 74% Binge view at least once a day 60% 47% “My wife fixed our iPad and our dishwasher by watching YouTube instruction videos. If a nuclear reactor started leaking, she would go to YouTube and then volunteer to fix it.” Simon, 44 years old, US Figure 3: Percentage of consumers watching YouTube with different frequency More than three hours a day At least daily At least weekly Less than weekly Never 2011 2015 13 6 3 8 24 33 34 32 28 19 Source: Ericsson ConsumerLab, TV and Media studies, 2011 and 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 9 markets S-VOD users Non S-VOD users
  • 6. This year, just as last year, as many consumers say they watch streamed on-demand video and TV at least once a week, as who watch scheduled linear TV. When looking at daily viewing, linear TV is still dominating, while slightly over 50 percent watch streamed on-demand video and TV (Figure 5). These changing habits are linked to the proliferation of connected TV screens, where consumers can easily and conveniently access their on-demand content. S-VOD users (that is, those paying for at least one S-VOD service) have a significantly higher penetration of smart TVs and connected, video-enabled devices. 86 percent of S-VOD users have and use a smart or internet connected TV, compared to 64 percent of non S-VOD users. Today, every third hour spent watching TV and video is via video on-demand (VOD). Almost 8 out of 10 teenagers say they watch on-demand TV and video daily, but among 60–69 year olds, less than 3 out of 10 do so. 6  ERICSSON CONSUMERLAB TV AND MEDIA 2015 EVOLVING MEDIA HABITS Figure 6: Percentage of consumers that have and use each device S-VOD users Non S-VOD users TV with access to internet content Game consoles (Wii, Xbox, PlayStation) Google Chromecast Other unit for online TV/video access on the TV Apple TV 75 51 23 19 17 47 30 10 8 6 Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Figure 5: Percentage of people watching different media types at least once per day Scheduled linear TV Recorded linear TV Streamed on-demand video (YouTube, short video clips, movies, TV series and programs) 0 2010 2011 2012 2013 2014 2015 25 50 75 100 Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in Brazil*, China, Germany, Spain, South Korea*, Sweden,Taiwan, UK, US, *excluded in 2010 figures [Showing: use once per day or more, 3 years moving average ¼, ½, ¼] A decrease in watching scheduled TV has been replaced by an increase in streamed on-demand viewing
  • 7. Pirate file sharing 2 1 The S-VOD effect is strong The growth of on-demand viewing can be attributed to easy-to-use and competitively priced or free services, such as Netflix and YouTube. Among the US population studied, as many as 52 percent say they use Netflix at least once a week, and 27 percent use it daily (Figure 7). YouTube boasts higher penetration, but considering that Netflix is a paid-for service, its performance is even more impressive. When it comes to daily habits, the other top five US on-demand services only manage to capture a fraction of what Netflix and YouTube gather on a weekly frequency. Netflix clearly stands out with its significant ratio of daily viewing. Linear TV remains key for many households The perceived value of scheduled linear TV remains high, mainly because of its premium content, ease of viewing and social aspects. Linear TV often acts as the ‘household campfire’ in a social respect, as well as enabling the viewing of live content, such as live sports. The different viewing habits between age groups is significant: 60 percent of millennials watch linear TV on a daily basis, compared to 82 percent of 60–69 year olds. This is a clear indication that linear TV will have to continue to reinvent itself in order to remain relevant to the younger population. ERICSSON CONSUMERLAB TV AND MEDIA 2015 7 Figure 7: Percentage of people using each on-demand service, on a daily vs. weekly basis, in the US Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in the US HBO Go/HBO Now 13 5 ABC.com 12 4 Apple iTunes 9 4 Xfinity on-demand 9 5 Crackle 9 1 Vevo 8 3 Twitch 6 3 Vudu 5 2 FiOS on-demand 3 2 Pirate streaming 1 2 U-verse on-demand 6 4 Amazon Prime 6 19 Hulu 8 19 Netflix 27 52 YouTube 41 71 At least daily At least weekly
  • 8. 8  ERICSSON CONSUMERLAB TV AND MEDIA 2015 VIDEO ON THE GO Millennials prefer the mobile screen TV and video content is increasingly being accessed via smartphones. In fact, since 2012 there has been a 71 percent increase in the number of consumers who watch video on their smartphones. When taking tablets and laptops into consideration as well, almost two thirds of the time spent watching TV and video among teenagers is on a mobile device. However, watching video on mobile devices is not limited to the youth. In the US, 86 percent of smartphone users watch video content on their phones. The reach of TV and video content on smartphones has increased significantly over the past few years, and two out of ten consumers regularly watch linear TV on their smartphones. Smartphone viewing continues to be driven by short video content, with 33 percent watching UGC, but S-VOD services are creating an impact too. One in five watch longer on-demand content, such as TV series and movies, on their smartphones. All in all, the average time spent watching TV and video on mobile devices, including tablets and laptops, has increased by three hours a week over the past three years. Figure 8: Percentage of consumers who watch each content type on their smartphone Video made by other consumers Downloaded content Live news Streamed on-demand movies Streamed on-demand TV series Recorded content Live sports Scheduled TV series Scheduled TV movies Live events Streamed, on-demand and other TV programs Scheduled other TV programs 33 11 9 8 8 7 6 6 6 5 4 4 Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets 71% increase in the number of consumers that watch video on their smartphones since 2012
  • 9. ERICSSON CONSUMERLAB TV AND MEDIA 2015  9 Tablets preferred for longer content Tablets and smartphones are used equally for watching short video content, but tablets are preferred for watching longer content. In the US, tablets have 588 average viewing minutes of Netflix per user, compared to 252 minutes for the smartphone (Figure 10). Wi-Fi makes up the majority of mobile viewing Even though Wi-Fi caters for a significant part of TV and video data traffic, in some markets, like the US, and to some extent also South Korea, mobile data has taken a significant part of the viewing consumption. In the US, cellular data usage makes up almost one third of the total data consumption for TV and video. However, this is dependent on technology. When 3G and 4G users are compared, the latter use significantly more data on TV and video. In the US, 4G users spend 2.5 times the amount of data on their TV and video viewing than 3G users. In the UK it is three times as much and in South Korea four times as much. Since 37 percent of consumers think the cost of mobile data away from the home is limiting their mobile viewing, continued growth will be dependent on the availability of services that enable cost-efficient mobile viewing, for example through bundling mobile data and video services. Figure 11: Measured proportion of smartphone usage of Wi-Fi vs. mobile broadband for TV and video apps Figure 10: Measured monthly average minutes per visitor for on-demand and streaming services Source: Ericsson ConsumerLab, TV and Media, 2015 study [comScore, MobileMetrix, Jan 2015] Base: Android and iOS users in the US accessing Netflix orYouTube on their smartphone or tablet respectively Source: Ericsson ConsumerLab, TV and Media, 2015 study [Nielsen on-device metering data] Base: Android smartphone users in the US, UK and South Korea accessing video content Wi-Fi data consumption Mobile broadband consumption Smartphone Tablet UK South Korea US 12%88% 80% 71% 20% 29% Figure 9: Share of total TV time by age group, measured on respective device Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Smartphone, tablet, and laptop Smartphone, tablet, and laptop TV screen and desktop TV screen and desktop 0% 16-19 20-24 25-34 35-44 45-59 25% 50% 75% 100% Age TV screen Laptop screen Tablet screen Desktop screen Smartphone screen YouTube Netflix 202 273 252 588
  • 10. 10  ERICSSON CONSUMERLAB TV AND MEDIA 2015 CONTENT DISCOVERY The decision-making process The growing range of available TV and video services is giving consumers a plethora of options to choose between. The final decision depends on the location, the device at hand, the available services and the available content. The difficulties in finding content Half of consumers that watch linear TV say they can’t find anything to watch on a daily basis. Among consumers aged 25–34, it is an even greater challenge, with as many as 62 percent saying they face this. When consumers can’t find anything to watch and recommendation engines fail to help, consumers simply ‘default’. Defaulting is when consumers give up and resort to, or settle for, a viewing habit they are familiar with, despite having had other viewing ambitions. Defaulting indicates that the service does not cater to the consumer’s needs. Personal information and the service experience Consumers are open to providing personal data in order to get a better service experience. 31 percent of consumers would like recommendations based on their own viewing habits and demography. Sharing personal information differs between generations, with millennials being the most comfortable with data sharing. There is a high level of trust: one in two consumers who have a TV service provider, trusts that their provider will handle data securely and responsibly. Figure 12: The different decision-making processes when choosing TV or video content to view More active and intentional process The device used influences the viewing choice Viewing linear TV creates continued random channel surfing Being on-the-go with only the smartphone at hand drives YouTube viewing Device governed Consumer content preference influences viewing choice What series should I watch? What service should I subscribe to? Pre-defined idea about content, drives the consumer to a specific device and service where the content can be accessed Content governed The service used influences the viewing choice Using an on-demand service drives binge watching, and the refined search for the perfect content for the moment Service governed The situation influences the viewing choice What options are available? What can I watch? What should I pay for? Situation devices available possible services accessible content Situational Source: Ericsson ConsumerLab, TV and Media, 2015 More contextually influenced process 50% of consumers who watch linear TV say they can’t find anything to watch on a daily basis
  • 11. ERICSSON CONSUMERLAB TV AND MEDIA 2015  11 Searching for serendipity Traditional linear TV has a distinct element of serendipity: discovery through happy coincidence when flicking between channels. In traditional linear TV, it is common for people to accidently find programs they didn’t know about, but are interested by. In the on-demand environment, consumers often feel they already know what is available in the service, and wish to be positively surprised. Serendipity is however possible for on-demand services. It can be created, for example, by the interplay between multiple services. This interplay is evident in the current practice of linked viewing, where friends and family send links to interesting content through social media, YouTube recommendations that engage the viewer, and the promotion of new title releases. There will be a distinct need for on-demand platforms to pleasantly surprise consumers all the time. Discovering and remembering content Content discovery for linear as well as for on-demand viewing is a challenge for consumers. They feel that recommendation features are not smart or personal enough: they do not surprise or inspire. The challenge with receiving numerous suggestions and recommendations throughout the day is remembering what was worth watching. Coping mechanisms to aid memory include writing lists or photographing title art. Once in front of theTV, 40 percent of consumers still turn to the TV guide, of which only 29 percent are satisfied with. The consumers’ appetite for an inspiring content discovery process is not yet met. Figure 13: Percentage of consumers interested in different recommendation features for content and TV services Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Personalized TV service offering based on own viewing habits Personalized content recommendation based on own ratings of previously viewed content Personalized content recommendation based on own viewing habits, age, gender and zip code Content recommendations that are not based on any personal information 32 32 31 22 “If people who are into shows post ‘oh my God this episode is crazy’, I trust them.” Melinda, 28 years old, US
  • 12. 12  ERICSSON CONSUMERLAB TV AND MEDIA 2015 CORD-CUTTERS AND CORD-NEVERS Catering for consumer needs Technological innovations and new services allow consumers to migrate their viewing to multiple platforms. Easy-to-use OTT services for both VOD and linear TV give consumers more confidence to move parts or all of their viewing from traditional TV services to OTT services. One in four consumers studied has cut or shaved their traditional TV service in the past year. This has not changed compared to 2014. 47 percent of these consumers reduced or eliminated it for cost-related reasons, and 33 percent didn’t believe they were watching enough TV to justify the cost. This indicates that OTT services are perceived to provide better value for money, as can be seen in Figure 14. Traditional linear TV vs. on-demand services As can be seen in the US data portrayed in Figure 15, there is a significant difference in the Net Promoter Score (NPS) between traditional linear TV services, and on-demand services. The former scores only 10 points, whereas the latter scores 36. The difference is even higher, with a 72 point difference between the highest scoring on-demand service and the lowest scoring traditional linear TV service in the US. Interestingly, low scoring linear TV service providers rate significantly better on their on-demand services than on their traditional services. Figure 14 highlights what service providers do well (reinforce), and where consumers feel they can improve (fix). For traditional linear TV services, only video quality ends up under the ‘reinforce’ segment, and both price and availability of content need to be addressed. Meanwhile, for on-demand services, price and available content are strong points, with no weak points in any areas. The NPS results are therefore unsurprising. Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Figure 14: Consumer evaluation of content providers Derived relative importance Averagesatisfaction Traditional linear TV providers On-demand services Maintain Aspects that satisfy the consumer and should continue to be supported Less important aspects that need to be monitored in case they increase in importance Monitor Video quality Video quality Mobility Mobility Relevant content Relevant content Price Price Recommendation function Recommendation function Highly important aspects to the experience, and are the most satisfactory Reinforce Highly important aspects that are not satisfactory and need immediate improvement Fix
  • 13. ERICSSON CONSUMERLAB TV AND MEDIA 2015 13 Converting cord-nevers to pay TV Cord-nevers – consumers who have never paid for managed TV services – already know how to find content. These consumers struggle to understand the value behind traditional linear TV, especially with inflexible packages, long contracts, lots of advertising, and high costs. Half of these consumers believe they will never pay for a managed TV service, even in the future. However, 22 percent of these consumers are already paying for TV and video in the form of OTT services. This indicates a willingness to pay for subscription TV, albeit with a different approach. In order to meet these consumers’ needs, a pay TV service with a clear value needs to be provided. Cord-nevers consume less Those classed as cord-nevers watch less TV and video content in general. They spend less time viewing broadcast TV and downloaded content, and stream less VOD (Figure 16). The majority of the time these consumers spend watching TV and video content is taken up by movies, series and other programs on scheduled broadcast TV. For these consumers, the focus is not on getting more content to consume, but rather having the means of accessing quality content when they have time to spend watching TV and video. Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Figure 16: Average number of hours (per week) of active TV/video viewing, split by age and whether they pay for managed TV (over the last 12 months) Millennials (16-34) Older (35-59) Corders – increased Managed TV subscribers who have increased their spending Corders – unchanged Managed TV subscribers who have not changed their spending Cord-nevers Those who have never paid for managed TV Cord-shavers last year Managed TV subscribers who have decreased their spending Cord-cutters last year Those who once paid for managed TV but eliminated their spending 36.1 33.3 33.0 29.1 25.7 23.1 34.0 29.5 28.1 25.1 Figure 15: Likelihood to recommend each type of TV/video service to a friend, family member or colleague, amongst those who use it (US market) Promotor Neutrals Detractor Don’t know Traditional linear TV services On-demand TV/video services 38% 50% 33% 27% 34% 14% Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in the US NPS NPS10% 36% 2% 2%
  • 14. 14  ERICSSON CONSUMERLAB TV AND MEDIA 2015 NEW BUSINESS MODELS In search of a new experience The emergence of today’s demanding consumers puts new requirements and expectations on the TV and media experience. There are three specific areas that influence a consumer’s service experience: great content; flexibility; and a high quality overall experience. The desire for quality content, such as original productions, new releases and sports is not new. It is sustained by significantly higher interest and willingness to pay than for other content types. 50 percent of consumers are very interested in getting the latest theatrical releases direct to TV. Subscription-based OTT services already offer the ability to ‘hop-on hop-off’ services without any binding times. 78 percent say they have never done this, but they appreciate the opportunity. Another highly valued ability is accessing content anytime and anywhere, something 42 percent feel is very important. Consumers also wish for a TV/video bundle with unlimited mobile data, allowing them to watch content on the go, without the risk of running out of data. This is very important to more than one third of consumers. To aggregate content on top of bundling broadband, data plans and video would make for a seamless service experience. 78 percent of consumers would prefer to get their TV, mobile and internet service from the same provider. Overall, supporting these three areas will be crucial when creating the 21st century TV and media offering, and bringing it to consumers. Changing attitudes and acceptance of advertising Consumers understand that advertising is needed to finance the production of premium content. However, they feel they are shown meaningless advertising. Over half of consumers say they switch channels to avoid advertising, while 43 percent say that they leave to do something else while adverts are shown. OTT services such as Netflix and Amazon Prime exclude advertising altogether, creating new expectations of what amount of advertising is reasonable for on-demand services. Advertising at the beginning of playback, such as withYouTube, is most appreciated when watching online, as the ads rarely interrupt the clip once it has started to play. The online environment is ideal for less intrusive ads, tailored to their audience. 40 percent of consumers state that they would be interested in customizing the ads they see by preference and rating, which would provide a more personalized advertising experience. However, for now, consumers continue to avoid advertising on traditional linear TV.
  • 15. ERICSSON CONSUMERLAB TV AND MEDIA 2015  15 Entering a world of entertainment The traditional TV and media offering, with linear channels as the main product and all other features complementary, is challenged by consumers. Consumers now want a world of entertainment at their fingertips. Offerings should include a range of added services, such as linear channels, catch-up, VOD capabilities and more, all constructed in a seamless way. 46 percent of consumers show high interest in a service that offers such an integrated experience, together with the ability to view content on any device (Figure 18). Figure 17: Percentage of consumers who adopt coping mechanisms while adverts play Figure 18: Percentage of consumers interested in a TV media offering that combines linear channels, on-demand selections and cross-device access, all in one monthly bill Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59, in 20 markets Source: Ericsson ConsumerLab, TV and Media, 2015 Base: At least weekly viewers of video/TV with broadband at home, aged 16–59 in 20 markets Change the channel in order to watch something else Leave the TV to do something else Browse the internet on the phone/tablet in front of the TV Use social media on phone/tablet in front of the TV Record the show, TV series, or movie in order to be able to skip/fast foward Watch the show, TV series, or movie through illegal streaming or downloading Avoid TV channels with advertising completely or watch channels that don’t have advertising No, I always watch TV and video ads and commercials Other strategy in order to not watch TV and video ads Use an ad-blocker Only use services with little/no ads 52 43 34 31 30 20 12 12 10 8 6 Very interested 6 5 4 3 2 Not interested at all 22 24 23 11 7 4 3 7 would like to influence ads to show products and areas they are interested in 40% 1
  • 16. EAB-15:030587 Uen © Ericsson AB 2015 Ericsson SE-126 25 Stockholm, Sweden Telephone +46 10 719 00 00 www.ericsson.com The content of this document is subject to revision without notice due to continued progress in methodology, design and manufacturing. Ericsson shall have no liability for any error or damage of any kind resulting from the use of this document. Ericsson is the driving force behind the Networked Society – a world leader in communications technology and services. We are in a uniquely strong position to understand how the worlds of media and telecoms are converging. Our heritage in TV and media spans more than 25 years of cutting-edge innovation, enabling many of the milestone shifts. Our services, software and infrastructure – especially in mobility, broadband and the cloud – are enabling the telecom industry and other sectors to do better business, increase efficiency, improve the user experience and capture new opportunities. With approximately 115,000 professionals and customers in 180 countries, we combine global scale with technology and services leadership. We support networks that connect more than 2.5 billion subscribers. Forty percent of the world’s mobile traffic is carried over Ericsson networks. And our investments in research and development ensure that our solutions – and our customers – stay in front. Founded in 1876, Ericsson has its headquarters in Stockholm, Sweden. Net sales in 2014 were SEK 228.0 billion (USD 33.1 billion). Ericsson is listed on NASDAQ OMX stock exchange in Stockholm and the NASDAQ in New York.