Connected TV: Friend or Foe of Broadcast Television
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Connected TV is a game changer in the transformation of television viewing. But is it a friend or a foe to traditional TV? Learn the impact of CTV device introduction on TV viewing households based on a Nielsen study commissioned by digital video pioneer YuMe. Find out if CTV can expand diversity in TV viewing options without compromising broadcast viewing time.
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Connected TV: Friend or Foe of Broadcast Television
- 1. CTV: FRIEND OR FOE OF TRADITIONAL TV? Impact of CTV Device Introduction on TV Viewing Households © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc.
- 2. Pay TV HHs have dropped below 100M for the first time ever (99MM Pay TV HHs) Connected Device HHs are on par with Pay TV HH scale (93MM CTV Device HHs) VIDEO CONSUMPTION PARADIGM SHIFT
- 3. 3 C O N N E C T E D T V D E V I C E U S A G E C O N S U M E R S H A V E M A N Y O P T I O N S F O R V I E W I N G V I D E O O N C T V © 2016 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. 6 3 M I L L I O N U S E R S Video Game Consoles 5 6 M I L L I O N U S E R S Smart TVs 2 9 M I L L I O N U S E R S Blu-ray Disc Players 1 3 1 M I L L I O N U S E R S 190 MILLION CTV CONSUMERS (US)* TOTA L C O N N E C T E D T V U S E R S , BY D E V I C E Streaming Media Players (Combined: Roku, Google Chromecast, Amazon Fire, Apple TV) Source: eMarketer, October 2016; Additional data in Appendix *Estimates are based on the analysis of survey and traffic data from research firms and regulatory agencies, sales projections, historical trends, company- specific data, and demographic and socioeconomic factors.
- 4. 4 C O N N E C T E D T V L A N D S C A P E C T V O W N E R S H I P I S P O P U L A R A C R O S S A L L A G E S A N D B O T H G E N D E R S © 2016 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. 80% of Men own a CTV 76% of Women own a CTV 77% of Adults 18+ Own at Least One CTV Device 86% 86% 83% 66% 77% 77% Teens (12-17) Millennials (18-34) Gen X (35-44) Boomers (45-65) Adults 21+ Adults 18+ Source: Interpret New Media Measures Q3 2016 R E A C H B Y A G E % Composition of each age who own a CTV (Smart TV, Blu-ray, OTT, Game Console)
- 5. 5 D E M O G R A P H I C L A N D S C A P E C T V O W N E R S H I P B Y E T H N I C I T Y © 2016 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. % Composition of ethnic group who own a CTV (Smart TV, Blu-ray, OTT, Game Console) R E A C H B Y E T H N I C I T Y Source: Interpret New Media Measures Q3 2016 Hispanic and African American U.S. Consumers are slightly more likely to be CTV Owners than White or Asian Consumers 82% of Hispanic Consumers Own at Least One CTV Device 70% 70% 77% 80% 82% Other Asian White/Caucasian African American Hispanic
- 6. 6 C H A N G E S I N C O N S U M E R V I D E O V I E W I N G B E H AV I O R S T H E F U T U R E O F ‘ T V V I E W I N G ’ © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. *customers who have used a subscription-based or transaction-based streaming video service within the past six months 83% OF DIGITAL VIDEO VIEWERS US A MIX OF PAY AND NON-PAY TV OF CUSTOMERS* USE A STREAMING SERVICE TO BINGE WATCH 62% ONE IN FIVE U.S. HH ARE CORD CUTTERS/ CORD NEVERS 20%
- 7. 7 C T V : F R I E N D O R F O E ? O B J E C T I V E A N D M E T H O D O L O G Y © 2017YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. • What impact does the introduction of a CTV device into a household have on linear TV viewing? • How does CTV impact overall video consumption? • How has the introduction of CTV impacted specific viewer types? Key Questions Methodology Phase I: Device Audit Survey • Online survey fielded from 7/6 to 7/18 2016 • Aligned age / gender / income based on US population characteristics Sample Sizes • Total responses: 2402 / 1,475 CTV device HHs / 845 OTT device HHs • OTT – i.e. Roku, Apple TV, Chromecast, internet connected Blue Ray players • CTV – includes all OTT devices and Smart TVs / internet connected gaming consoles
- 8. C TV USAGE SINCE 2014 A V E R A G E T I M E S P E N T U S I N G C T V D E V I C E S H A S I N C R E A S E D , E S P E C I A L LY M O R N I N G A N D L AT E N I G H T © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. 8 Q5e. About how many hours are spent in each of the following time periods throughout the typical week? Base: Device Used in Household in Past Week – CTV Device: 2014 (808), 2016 (1017) 0.6 1.2 1.0 2.2 3.4 0.90.8 1.5 1.2 2.7 3.8 1.3 5am - 9am 9am - 3pm 3pm - 5pm 5pm - 8pm 8pm - 11pm 11pm - 2am AVERAGE TIME (HOURS) SPENT ON CTV BY DAYPART 2014* 2016 * Represents data collected by YuMe/Nielsen in 2014
- 9. 80 74 141 126 74 59 37 Pre Post Average Daily Video Watching Minutes before and after the introduction of OTT streaming OTT Other* Cable Broadcast T o t a l 2 9 5 M i n . T o t a l 2 9 6 M i n . INTRODUCTION OF OT T STREAMING INTO THE HOUSEHOLD O N A V E R A G E , 3 7 M I N U T E S O F D A I LY V I E W I N G T I M E I S S H I F T E D T O O T T Post Data is defined as: The first broadcast date that a National People Meter Household member was exposed to OTT content between January 1, 2013 and May 31, 2016. *The average daily minutes the set is tuned to a signal other than those outlined (includes AOT, DVR, DVD, VCR) -- activity originating from a gaming console is excluded. n=16091 9 W H I L E V I R T U A L L Y N O C H A N G E I N O V E R A L L V I E W I N G T I M E , 3 7 M I N U T E S P E R D A Y I S D E D I C A T E D T O O T T V I E W I N G C H A N G E I S L A R G E L Y A T T H E E X P E N S E O F C A B L E A N D O T H E R V I E W I N G © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc.
- 10. 39 35 57 51 36 28 19 Pre Post Average Primetime Video Watching Minutes before and after the introduction of OTT streaming OTT Other* Cable Broadcast T o t a l 1 3 2 M i n . T o t a l 1 3 3 M i n . IMPACT OF OT T VIEWING ON DURING PRIMETIME 1 4 % O F P R I M E T I M E V I E W I N G N O W I N C L U D E S O T T S T R E A M I N G ( 1 9 M I N U T E S ) Post Data is defined as: The first broadcast date that a National People Meter Household member was exposed to OTT content between January 1, 2013 and May 31, 2016. *The average daily minutes the set is tuned to a signal other than those outlined (includes AOT, DVR, DVD, VCR) -- activity originating from a gaming console is excluded. n=16011 10 W H I L E V I R T U A L L Y N O C H A N G E I N O V E R A L L V I E W I N G T I M E , 1 9 M I N U T E S P E R D A Y I S D E D I C A T E D T O O T T V I E W I N G C H A N G E I S L A R G E L Y A T T H E E X P E N S E O F O T H E R V I E W I N G © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc.
- 11. 11 W H I C H D E M O G R A P H I C S A R E I M PA C T E D T H E M O S T W I T H C T V / OT T D E V I C E S C T V D R I V E S H I G H E R T U N E - I N T I M E S W I T H H A R D T O R E A C H T V V I E W E R S © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. Light TV Viewers MillennialsHHs w/ Children 39 min. daily viewing Light TV viewers increase viewing time by the largest margin compared to medium and heavy TV users when introduced to CTV / OTT devices. 42 min. daily viewing for HHs w/ 4 children Households with 1-3 children watch content on CTV / OTT devices between 38 to 40 minutes daily, making these devices an optimal choice to reach co- viewing audiences. 47 min. daily viewing Millennials rank #1 amongst all key demographics in video consumption when introduced to CTV / OTT devices. Source: YuMe, CTV: Friend or Foe of Traditional TV?, April 2017
- 12. 79 73 100 97 48 42 81 74 135 120 221 200 84 73 126 109 74 60 77 63 65 51 65 50 36 42 39 39 VIEWING TIME BY RACE CHANGE IN AVERAGE MINUTES PER DAY OTT Other Cable Broadcast TV VIEWING TIME BY RACE V I E W I N G T I M E A N D C O M P O S I T I O N D I F F E R S B Y R A C E © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. 12 White African American Asian American Hispanics 288 289 398 402 197 205 272 272 +1 +8+4 +0+/- TOTAL Base: White n=11555, African American n =1989, Asian n=1213, Other n=1328
- 13. KEY TAKEAWAYS P U T T I N G I T A L L T O G E T H E R • The introduction of a CTV device does not significantly affect average television viewing time. • Adding an OTT device causes “DVR, VOD, DVD” offline viewing minutes to lose largest share of viewing time in move to online streamed content. • Light TV viewing households increase daily average viewing time by 32% after adding an OTT device. • Households with children spend more time watching on OTT devices than childless households. In addition, the more children, the more time spent on OTT. © 2017 YuMe Inc. All Rights Reserved. YuMe logo is a registered trademark of YuMe Inc. 13
Editor's Notes
- We would get a lot of questions about how overall media consumption has been impacted by the advent of on-demand viewing. So we conducted this study with Nielsen to further understand how connected TV devices are affecting traditional linear TV viewing behaviors. As with all of our studies, our exploration is driven by our clients & our own curiosity about what viewers are doing & how this should impact media decisions. So we wanted to address the amount of time spent on linear TV that has been chiseled out and dedicated to Connected TV viewing. How Broadcast, Cable and Connected TV viewings varies for light & heavy TV viewers. Do these changes differ by day part, content genre, demographics, and overall usage levels? Then lastly, what content genres saw the most shift from linear TV to Connected TV viewing.
- Shift in consumer media behaviors are driving entertainment and media companies to grow viewership outside of traditional pay-TV. This is resulting in a demonstrable shift in the video landscape, as what defines ‘television’ viewing is rapidly changing… Pay TV households dropped below 100MM for the first time ever last year, while the number of Connected TV households continued to scale to critical mass as a way to reach engaged audiences. What’s important to note is that overall consumption and time spent in front of a TV set hasn’t changed, but what’s shifted is how consumers are accessing content on the biggest screen in the home. Talking Points: Pay TV HHs have dropped below 100M for the first time ever Connected Device HHs are on par with Pay TV HH scale WHERE WE ARE TODAY AND WHERE WE ARE GOING…. By 2020 CTV HH are expected to be 97.7MM surpassing pay tv HH of 95MM
- Talking Points Game console users were at 53MM last year A year ago OTT users were much closer to 40MM while A rapidly evolving market has led to significant changes in numbers by platform over the last 12 months. A year ago, Game Consoles held the top spot but much more moderately priced OTT devices ($35 Chromecast, $40 Amazon Fire Stick, $100 Roku, $150 Apple TV) with more simple UI’s and more content drove tremendous market growth. A year ago OTT users were much closer to 40MM while Game console users were at 53MM. The other spike is happening with Smart TVs: 80% of the TV’s manufactured globally by the major OEM’s are now capable of connecting to the internet, and price has come way down (Smart TV 3 years ago = $1200+, today 50” Smart TV = $400 - $500). Much closer to 20MM active Smart TV users a year ago. Gaming consoles are also being used MUCH differently than many of us understand 2015 marked a year in which officially over 50% of time spent on average on game consoles is now spent in NON-GAMING activities and streaming video is the primary culprit. The Playstation platform is now the #1 streaming destination both globally and domestically for both Netflix and Amazon Instant Video. Every quarter, 250,000 individuals enter the US workforce, most of them younger millennials just out of college or grad school and with their first stream of “disposable” income, and most of them aren’t paying for cable. Why spend $130 - $180 a month on a cable subscription when they can create their own “skinny bundle” that is much more cost effective. Connected TVs are TV sets connected to the internet through built-in internet capability or through another device such as a Blu-ray player, game console, or ‘over the top’ (OTT) device (e.g., Apple TV, Google Chromecast, Amazon Fire, Roku), etc. Smart TVs are TVs with built-in internet capability. The average connected TV household has an average of 3.3 connected TV devices (Leichtman Research Group, April 2016) http://www.leichtmanresearch.com/press/042216release.html Methodology: Estimates are based on the analysis of survey and traffic data from research firms and regulatory agencies, sales projections, historical trends, company-specific data, and demographic and socioeconomic factors. eMarketer Definitions: HH’s with at least 1 connected TV set where at least one individual of any age in the HH used the internet through a CTV at least once per month Connected TV: a TV set connected to the internet through built-in internet capability or via another device, such as a Blu-ray player, game console, or ‘over the top’ (OTT) device (e.g., Apple TV, Google Chromecast, Amazon Fire, Roku), etc.. Smart TV: A TV set with built-in internet capability. Over-the-top (OTT) video service: Any app or website that provides streaming video content over the internet and bypasses traditional distribution; examples include Hulu, Netflix and YouTube. Traditional distribution includes IPTV, cable, satellite, wireless carriers and fiber operators, multiple system operators (MSOs), multichannel video programming distributors (MVPDs), and major television broadcast and cable networks
- Talking Points: Current demographic breakdown provides another insight into the rapid evolution of the CTV Space. Early on (2011/2012) millennials drove growth, now it’s everyone. Staggering that 60% of Boomers own a CTV device. It makes sense when you think about not only how easy it is to activate now but that a lot of the folks in market for a newer, higher end TV, all of which happen to be smart, fit into an older, more affluent demo. And the content is appealing to everyone. House of Cards, Transparent, and many of the other award winning streaming shows cater to an older demo.
- Talking points: Speak to cost effectiveness in regards to Hispanics. We saw the same trend with smartphones, the were leaning on one device that could do everything, their smartphones were often times also their PCs. Streaming devices not only allow for much more cost efficient bundling but also often can deliver a lot more foreign language content and international sports programming than a traditional cable subscription. Note: Increase in ownership of CTV devices by African Americans: 80% in Q3 2016 vs. 68% in Q4 2015
- Viewing habits have changed over the last few years… Given the majority of digital video viewers use a mix of Pay TV and non-Pay TV, its extremely important to target consumers from all screens. Delayed viewing has become a problem for TV buyers, but with more consumers binge-viewing, it has created a new opportunity to reach and engage Cord nevers have arrived in a big way – with 250k entering the workforce mostly college or grad school graduates – they aren’t using their new displosable income on cable So how can TV Buyers adapt to this changing landscape? Follow the viewers beyond linear TV. Considering viewers are now consuming content on a mix of Pay TV and non-Pay TV, Connected TV is a great platform to reach TV ‘defectors’ given the amount of time spent on emerging Connected TV devices. Talking points: Cord Nevers have arrived in a big way. Every quarter, 250,000 individuals enter the US workforce, most of them younger millennials just out of college or grad school and with their first stream of “disposable” income, and most of them aren’t paying for cable. Why spend $130 - $180 a month on a cable subscription when they can create their own “skinny bundle” that is much more cost effective. Average cable subscriber uses 17 channels regularly out of the 800+ they have access to. Pay for internet – Netflix = $10/mo, HBO Now = $15/mo or borrow friend’s login, Sling TV = $20/mo, no contract, Playstation Vue, etc. Source: emarketer Pay TV and Non-Pay-TV User Share Among US Digital Video Viewers, July 2016 Source: JD Power Streaming Video Customer Satisfaction Highest When Paired with Pay TV Subscription, J.D. Power Finds, Aug 2016 By the end of 2017, cord-cutters and cord-nevers will hit 24.4 million US households which makes up about 20% of US households 7.4 Million Cord-cutter US HHs, an increase of 700K vs. 2016 17.0 Million Cord-never US HHs, an increase of 800K vs. 2016 Current Pay TV Households – totals 98.2 MM TV Households (Q3 2016) Cable: 52.8MM vs. 52.3MM last year Satellite: 35MM vs. 34.6 last year Telco: 10.8MM vs. 13.5 last year Source: Nielsen, "The Total Audience Report: Q3 2016“ Note: based on weighted counts for the 15th of each month within the quarter. The sum of satellite, telco and wired cable may be greater than cable plus due to homes that have multiple providers. In 2016 the number of US households subscribing to a paid TV service dropped below 100 million. Widespread availability of digital content makes cord-cutting a viable and more affordable option as cable subscription has increased dramatically (+5-7% annually) Additional stats in Appendix.
- How was this study conducted? Well we looked at 2,400 real Nielsen households from their National People Meter panel. 1,400 had a Smart TV & the remainder had an over the top box such as an Apple TV or Chromecast. The National People Meter panel is 50,000 strong. During our recruitment period from July 6-18 we looked at panelists who connected a Smart TV or OTT device for the first time then looked at their viewing 28 days prior to a Connected TV hookup & viewing 28 days after a Connected TV hookup.
- Comparing the amount that viewers spend on Connected TV devices per week by day part from 2014 to 2016 we that can see that every day part has seen an increase with the average increase over the day being 26%. As we would expect the primetime slots have accounted for the most time spent.
- Now looking at the results, you can see that overall time spent sees almost no change going from 295 mins/day pre OTT to 296 mins/day post OTT. This is quite interesting data. Personally, before this study I intuitively assumed that total viewing time has increased as result of on-demand content. That linear TV would be cannibalized marginally, while on-demand viewing accounted for a significant share of total time causing the increase. This is clearly not the case. Broadcast saw little decrease. Where we see the most cannibalization is with Cable & other which includes things like DVR. Why we think this is is that Cable networks have done a better job at diversifying their distribution of programming into Connected TV devices. Couple examples of this are HBO with now HBO Go, and Amazon Prime who will distribute cable shows. Some of our Connected TV partners like A&E and History have also done this.
- Same story with primetime. Last areas where OTT & time shifted viewing has not cannibalized viewing from linear TV is with Sports & Awards shows.
- Here is what we like to call our “hard to reach” audiences and you can see that even light TV viewers are spending nearly 40 minutes on their CTV device when first introduced. Moving on, households with children were watching an average of 42 minutes so this is a great screen to reach co-viewing families because on-demand viewing allows them to be more efficient when selecting programming. Tech-savvy Millennials out-weighed their reduction in cable & broadcast with OTT viewing. This is new data for us that does not necessarily fall in line with our intuitive thinking, so I am open to hearing other interpretations.
- *update “other” to Hispanics* Across ethnicities Asian American’s viewing increased the most by introducing Connected TV, followed by African Americans. 42 mins are spent consuming video content when first introduced to CTV. African Americans are more likely to own a CTV device than White or Asian consumers according to Interpret New Media Measure So wrapping this up. The introduction of Connected TV device does not cause change to overall viewing time, but we do see the most cannibalization out of the Cable bucket. Light TV households saw a strong 32% increase in the total time they view television with the introduction of a Connected TV device. Heavy OTT households saw a minor 2% reduction. Those with children watch more on OTT devices but less time overall possible as result of being able to manage their TV viewing time more wisely.
- So wrapping this up. The introduction of Connected TV device does not cause change to overall viewing time, but we do see the most cannibalization out of the Cable bucket. Light TV households saw an strong 32% increase in the total time they view television with the introduction of a Connected TV device. Heavy OTT households saw a minor 2% reduction. Those with children watch more on OTT devices but less time overall possible as result of being able to manage their TV viewing time more wisely.