Ericsson Consumer Lab makes a clear observation: television viewers want custom content that is available at any given time and through any given device. They are not turning their backs to television but refuse to accept the constraints of linear, standardized and rigid broadcasting models.
Traditional broadcasters still have the opportunity to adapt, but it is more than time for them to react, according to Ericsson's TV and Media 2016. This study concludes that the consumers of tomorrow will require more to be satisfied, but it is a task that is well worth doing because their love for TV and video content will continue to grow in the future.
Television is no longer the first screen of choice
The study’s initial observation is that television is no longer the first screen of choice. Within all age groups, 35% of users watch TV on a daily basis, but television is the second screen they watch most. That proportion reaches 46% among millennials. Of course, watching television is not incompatible with other activities: viewers no longer hesitate to search the web for information on the content they are watching and to view two or more shows at the same time.
I need two screens – one for social media and one for catching up, streaming series or movies. Social media is where my main attention is, and the movie is more for background noise.
– Lethabo, a 26-year-old South African.
The mobility centric replaces the couch potato
Reduced to the role of background noise, TV seems faced with an uncertain future, namely because of the number of new screens that are taking its place: PCs, tablets, smartphones, and so forth. Among this plethora of new screens, mobile devices are becoming increasingly important as an audiovisual consumption venue. Since 2012, watching videos on smartphones is an activity whose frequency has increased by four hours per week whereas watching videos on fixed screens is down by two and half hours [per week].
The stereotypical couch potato is currently being replaced by a new profile, the mobility centric, who uses mainly a smartphone to watch videos. Mobility centrics account for 5% of all people who watched television in 2010, i.e., a percentage equal to the number of TV couch traditionalists six years ago.
The diversification of uses is an opportunity to be seized by television
On-demand video services have been highly successful with consumers these past years, as demonstrated by the high growth rates registered by Netflix, Amazon Prime and traditional channels’ on-demand video services.
From 2010 to 2016, the number of hours spent watching TV decreased by 16%. Nevertheless, the time spent watching films, series and other on-demand TV programming increased by 50%. This is particularly the case among millennials who spend on average 2.9 hours streaming TV series and on-demand video content, compared to 1.4 hours among 35 year-olds and up. These figures speak volumes about the profound transformation of uses, and the urgency for television to adapt to this trend.
Quality is more important than free services
Moreover, users spend increasing amounts of time searching for content. On average, they will lose 1.3 years of their lives zapping and surfing their TV programming guide to find their favourite series. Content has therefore become a real issue to which traditional players have not yet managed to adapt, contrary to the increasing number of on-demand services that have successfully seized the opportunity opened up by this flourishing market.
Finally, users are ready to spend more to access content that is adapted to their profile, which represents their third more important factor when subscribing to pay-to-view services. Since 2012, American households spend 60% more on on-demand video services.
Posted in: Industry Transformations