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New data shows limited video cord-cutting, but cable missing explosion of mobile device viewing

  Wednesday, September 18, 2013

Altman Vilandrie & Company’s annual consumer survey shows cable’s challenges and opportunities in courting younger viewers

The number of consumers “cutting the cord” from cable TV for Internet video remains low and live programming is still a huge viewer draw, according to a new annual survey of consumer viewing habits released today by Altman Vilandrie & Company. However, cable’s initiatives to bring content to mobile devices, dubbed “TV Everywhere,” have low awareness, and cable risks losing the mobile viewing battle to Netflix and other online providers.

Less than five percent of consumers watch online video regularly instead of subscribing to cable TV, a negligible increase over 2012. Most non-subscribers canceled primarily due to the affordability or value of cable, not because online video was a complete substitute. Those who have canceled spent less and subscribed to fewer services than average subscribers. The survey, conducted since 2009 with Research Now, also revealed surprising resilience in the popularity of live viewing and that watching shows when they become available is especially important to younger viewers.

Some dark clouds remain on the horizon for cable providers: 80 percent of consumers under 35 (and nearly half of older viewers) now watch TV shows and movies online weekly. Mobile device viewing is exploding, with more than a quarter of people under 45 watching TV shows and movies on a tablet weekly. The percentage of those watching TV and movies weekly on a smartphone has nearly tripled since 2011, from five percent to 14 percent in 2013. One in five 35-44 year olds now watch TV or movies on a smartphone every week.

“This is a good news/bad news story for cable operators,” said Altman Vilandrie & Company Director Jonathan Hurd, who directed the survey. “Live sports, news, and popular series are sustaining cable, and ‘appointment viewing’ is popular among younger viewers due to social media. But if operators can’t figure out how to market TV Everywhere they may lose out on younger viewers who want to watch TV shows on tablets, laptops, and smartphones.”

While the survey showed that most viewers want to keep a relationship with cable, more are paring back on the amount they pay in cable bills every month. So called “cord-shaving” has doubled since 2010, with 26 percent now reporting they have cut back on cable services like video-on-demand. In addition, more than 40 percent of subscribers under 35 admit they have “seriously considered” dropping cable TV service.

Other major findings of the survey include:

  • Among those keeping their cable TV subscriptions, the desire to watch live news (75%), new TV shows (66%) and live sports (59%) were the main reasons given.
  • Even with the boom in online and mobile viewing, the level of TV watching during normal broadcast time is roughly the same as in 2010, with 80 percent of consumers saying they do so weekly vs. 81% in 2010.
  • “Binge watching” of programs through Netflix or other sources has also gained popularity, with 54 percent of consumers now indulging in marathon viewing sessions of a specific program.
  • Only half of those under 35 want a traditional TV remote, preferring a mobile device or laptop.
  • Even though all of the major multichannel providers offer some form of TV Everywhere, only 32 percent said their cable TV subscription included access to this service. That number dropped to 24 percent for viewers over 55.
  • Nearly half of non-subscribers under age 35 said they expect to subscribe to cable within five years.

The survey, conducted by Altman Vilandrie & Company since 2010, also used discrete choice analysis to quantify consumers’ interest in add-on video and TV programming services. Key portions of this analysis, including comparisons of brand favorability of online providers (Netflix, Apple, Hulu) and traditional cable operators, will be released over the next several weeks.

Research Now fielded the online survey with more than 2,500 U.S. consumers in July and August. For details about further research topics and more information about the study, contact Jonathan Hurd at jhurd@altvil.com.

About Altman Vilandrie & Company
Altman Vilandrie & Company is a strategy consulting group that focuses on the telecom, media, technology and investor sectors. The company’s consultants are experienced in strategy, marketing, finance, M&A, technology, regulatory and operations disciplines. Based in Boston, with offices in New York City and San Francisco, Altman Vilandrie & Company enables clients to seize new opportunities, navigate mounting challenges, improve business performance, and increase investor value within complex and converging industries.

Ninety percent of the boutique firm’s operator clients are large- to mid-cap companies including service providers, technology and software developers, and media companies. Altman Vilandrie & Company’s financial clients include many of the largest and most prominent investors in the telecom, media and technology markets.

About Research Now
Research Now, the leading digital data collection provider, powers market research insights. We enable companies to listen to and interact with the world’s consumers and business professionals through online panels, as well as mobile, digital and social media technologies. Our team operates in over 20 offices globally and is recognized as the market research industry’s leader in client satisfaction. We foster a socially responsible culture by empowering our employees to give back.

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