What Do We Want from Our Tv?

WHAT DO WE WANT FROM OUR TV?

AN ANALYSIS OF MODERN TV EXPERIENCE FOCUSING ON CONSUMER

HABITS AND EXPECTATIONS

A Thesis

Submitted to the Faculty of

Drexel University

Gizem Yali Pepper

in partial fulfillment of the

requirements for the degree

Masters in Television Management

March 2017

DEDICATIONS

For my parents Sadiye and Kudret Yali and my husband Bryan Pepper, without their support I wouldn’t be here.

ACKNOWLEDGEMENTS

First of all, I would like to thank my thesis advisor Heather Foster of the Westphal College of Media Arts and Design at Drexel University. She was always available to direct me to the right direction whenever I had a question or concern about my paper. She assisted me to elevate my ideas to the next level by helping me ask the right questions.

I would also like to thank TVMN Program Director Albert Tedesco of the AWCOMAD

Professor Tedesco was very involved and interested in our academic progress. His passion in all media but specifically television has created a great environment for learning in the classroom, which eventually led to this paper.

I would also like to express my gratitude to the entire Drexel University, Westphal College of Media Arts and Design, TVMN faculty for assisting me through my academic journey.

I have learned so much from you and this accomplishment wouldn’t be possible without the education you have given me.

Finally, I must acknowledge the support, unity and friendship of the TVMN Graduate Class of 2016. I have never been in a classroom with so many bright, passionate and accepting people. I’m very happy to have you as my friends and hopefully someday as colleagues.

Author

Gizem Yali Pepper

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TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION ...... 1

1.1 Introduction ...... 1

1.1.1 Ways of Watching TV Content ...... 1

CHAPTER 2. LITERATURE REVIEW ...... 3

2.1 The evolution of traditional television ...... 3

2.2 Transformation of TV Habits ...... 4

2.3 The solution: Internet...... 7

2.4 Convenience Factors...... 9

2.4.1 Content Catalog and Original Programming ...... 10

2.4.2 No-commercials...... 12

2.4.3 Cost ...... 15

2.4.4 User Experience ...... 19

2.4.5 Accessibility ...... 22

2.4.6 Watch Anywhere ...... 23

2.4.7 Watch Anytime (Time Shifting) ...... 26

2.4.8 Binge Watching ...... 28

2.5 The Future of Television - What’s Next? ...... 31

2.6 Significance of this study ...... 32

CHAPTER 3. METHODOLOGY ...... 34

3.1 Introduction ...... 34

3.2 Hypothesis ...... 34

3.3 Research Questions ...... 35

3.4 Method ...... 35

3.5 Design of Instrument, Data Collection and Analysis ...... 36

CHAPTER 4. FINDINGS ...... 38

4.1 Research Question: “How many of the participants have at least one television set with

cable/satellite or OTA access in their household?” ...... 38

4.2 Research Question: “How much time viewers spend watching TV programs daily?” ... 39

4.3 Research Question: “Where does TV watching activity fit in their daily time allocation?”

4.4 Research Question: “What devices does the viewer use primarily to watch programming

produced for television and/or original content produced for streaming?” ...... 41

4.5 Research Question: “What are the most popular TV consumption habits?” ...... 42

4.6 Research Question: “Why does the sample audience group choose to watch TV on

platforms other than linear television?” ...... 43

4.7 Research Question: “Is there a correlation between the annual household income and

preference of TV provider?” ...... 44

CHAPTER 5. CONCLUSION ...... 46

CHAPTER 6. LIMITATIONS ...... 50

LIST OF REFERENCES ...... Error! Bookmark not defined.

APPENDIX 1. SURVEY QUESTIONS ...... 59

APPENDIX 2. SURVEY ANSWERS...... 64

LIST OF TABLES

Table 4.1.1 Survey Question: “Which of the following electronic devices do you own?”

...... 38

Table 4.1.2 Cross tabulation showing the age vs. IPTV and Traditional TV consumption

...... 39

Table 4.3.1 Cross tabulation of daily leisure time vs. daily hours spent watching TV .... 40

Table 4.4.1 Percentage allocation of TV programming consumed using various devices

...... 41

Table 4.5.1 Social media interaction about TV programming ...... 43

LIST OF FIGURES

Figure 1. Average number of channels watched in the US and Canada, Q4 2015 ...... 16

Figure 2. Number of channels received vs. number of channels viewed in the US, 1994-

2013...... 16

Figure 3. Cable subscription in the US by age, 2015 ...... 18

Figure 4. Access to DVR and SVOD services in the US, Q1 2016...... 22

Figure 5. Mean importance ratings of convenience factors as reported by the survey

participants ...... 44

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ABSTRACT

What Do We Want From Our TV? — An Analysis Of Modern TV Experience Focusing On Consumer Habits And Expectations

Gizem Yali Pepper

Rapid developments in media technologies and increasing Internet speeds have

given online television sources called Over The Top networks (OTT) the upper hand over

traditional television, in terms of convenience, customizability and content availability

without the cost of leading cable and satellite providers. The emergence and success of

OTT networks caused a new trend: cable-cutting. The purpose of this study is to shed some

light on the consumer decision between linear television and other television programming sources and platforms (consolidated under the name of ‘Advanced TV’). A survey has been conducted by the researcher to find the current trends in consumer habits, wants and needs to understand the reasons behind the movement of television from traditional platforms into the Internet.

Survey results have shown that the top three features most valued features of

Advanced TV are the following: low-cost compared to cable and satellite subscription, none or fewer commercial breaks and control options, for example pause, rewind and fast forward. Data also revealed that there is no correlation between the household income and price sensitivity when it comes to TV service pricing.

Two major consumer habits have been tested for this study binge watching and time shifting. Binge watching has been valued highly and reported as one of the Top 5 reasons

viii

to watch TV on online sources. Survey takers didn’t rate watch anytime and anywhere

features online sources, even though they stated they frequently watch their TV content on

their laptops, smart phones and tablets. This demonstrates the undervaluation of the ability of watching TV content on the go and time shifting.

As a summary, although linear television is currently relevant, increasing numbers of consumers are enjoying the exclusive benefits of online sources and some are even cutting the cord. The results of this study can pinpoint the features that give online sources competitive advantage over traditional television providers and inspire the cable and satellite providers to evolve to stay competitive in the changing environment of television.

CHAPTER 1. INTRODUCTION

1.1 Introduction

It is clear, today there are countless different ways to watch television. Audiences have many options in how and where to watch their favorite television shows, whether it might be on a smartphone via a streaming service or on a smart TV using a national broadcaster’s application. Consequently, to be more appealing to the consumer needs, media companies are also reinventing themselves. As Joel Espelien said, “Business strategies do not work forever, as the most effective schemes are copied and augmented by competitors” Therefore, the tight competition among established and newly emerged networks is acting as a catalyzer in the evolution of the television. Is this new entertainment landscape focused on viewer tastes and wants, the death of the television we know? The answer can be both yes and no.

1.1.1 Ways of Watching TV Content

As of 2016, consumers can use a wide array of products and services to access television programming. Some of these products are smart TVs with Internet connectivity, multimedia players such as Apple TV, Amazon Fire Stick and Roku Box and game consoles namely Xbox and PlayStation. These products use the Internet to stream shows that are produced for television through various applications. Today a large number of broadcast and cable networks offer their original programming via their own apps, however most of the networks require cable/satellite subscriptions to unlock and activate the content.

CBS is an exclusion with its own stand-alone service called All Access, which could be

watched via subscription to this service.

Netflix, Amazon Prime Video, Hulu and YouTube Red are other video streaming

services with the requirement of monthly subscription. These services also offer exclusive,

original programming, making them comparable with the broadcast and cable networks. A

service called Sling TV by DirecTV differs itself from the other online television sources

by letting its members to stream live television networks.

Additionally traditional television providers such as Comcast Xfinity and Verizon

FiOS, offer TV Anywhere and Video on Demand services with cable subscription for

thousands of hours of media.

These sources can be watched on an assortment of screens whether it’s on the go like a laptop, smartphone or a tablet or stationed like a television set, desktop computer and even a projector.

CHAPTER 2. LITERATURE REVIEW

2.1 The evolution of traditional television New technologies in personal electronic devices and video content distribution have made it possible almost everyone to have their own, personal ‘television’ which could be watched anytime and anywhere. The effect of this type of development is explained by

Elihu Katz as follows: “Today, the family members disappear in different rooms to consume their programs unless they are watching a live broadcast of a disaster, celebration or an important sporting event.” (Katz, 2009)

Another consequence of multiple television sets in a household is observable in the primetime ratings. Gary Holmes, the chief press officer at Nielsen Co. noted that the

Nielsen findings show, in 2008 season, more people are watching television during prime time than ever. Holmes showed the rapidly climbing numbers of TV sets owned by households as the main cause for this increase. (Holmes on TelevisionWeek, 2008) This should not be a surprise to researchers because as explained above, television is now an individual entertainment medium and there are more TV sets are being purchased; one for each room or one for every family member. Therefore, instead of having a single TV in only one room, to watch the same show, on the same network as a family, there are multiple televisions in a household, all showing different programs simultaneously for each individual.

Furthermore, although a wave of alternative television consumption methods have been introduced throughout the years, linear television still holds its popularity in 2015. A study conducted by Ericsson ConsumerLab found that at least once a week, 93% of the participants are still watching scheduled "linear" broadcast TV. However the role of

broadcast TV is changing due to the introduction of new distribution channels. More than

70% of consumers surveyed are streaming, downloading or watching recorded broadcast

TV on a weekly basis, and 50% are using Internet-based, on-demand TV/video every week.

(APB Magazine, 2015)

Therefore, when we go back to the question ‘Is TV dying?’ the answer is no, the

statistical evidence provided above shows the television of pre-2000s is still relevant and not dying. The answer is also yes, because industry leaders constantly point out that the traditional television is evolving and leaving the everyday life to make way to a whole new video content consumption device, mentioned as ‘Advanced Television’ by The Interactive

Advertising in their 2015 report. (Advanced Television Advertising, 2015)

2.2 Transformation of TV Habits So far the discussion has surrounded the change in television itself as a device and a medium, however this study focuses on the viewer and how the habits of television viewing has changed and are still constantly evolving. This variation in viewer habits started to surface with the emergence of interactive viewer tools such as DVRs and IPGs.

In 2003, the use of interactive program guides became popular; in 2005, 41% of digital cable customers reported that they found new channels to watch through their IPGs. (Lee,

2005) New technologies such as Digital Video Recorder (DVR), Interactive Programming

Guide (IPG) and Video On Demand (VOD) have notably enhanced the viewer’s television experience, because they gave the audience more control over how to watch television.

Bob Bejan, global executive creative director of AOL talked about this shift of control over content “The disruption [in television ecosystem] that we've all been talking about is

5 happening right now, we're seeing the breakdown of the traditional media landscape. The control and power is shifting into the hands of the consumer.” (Adweek, 2015)

Understanding the definition of linear and traditional television as it is used in this study is highly important. Linear or traditional television, used interchangeably, refers to the concept where the television programming received through cable, satellite or via over the air signals and watched only on network appointed times. More and more consumers watch traditional television content through alternative methods, since the introduction of new technologies related to television, in the last decade. This increase is apparent in the statistical data presented in 2015 IAB Advanced Television Advertising Report: 81% of

U.S. broadband households watch video on a TV set, while 60% watch content on a computer. 31% said they watch video on a smartphone, and 28% watch on a tablet. The

PC was the only platform to show any significant decline in video viewing in the past year.

(Freidman, 2014) As the data shows the cable-nevers (consumers who have never had a cable subscription) and cable-cutters (consumers who unsubscribed from their cable/satellite service) do not necessarily abandon their TV sets. “In fact, many homes are

actually watching streaming videos on their TV rather than just mobile devices. This benefits Netflix but also Google Play and other services that are accessible through set-top boxes by making these services feel more like traditional television without the commercials.” (ValueWalk, 2015) The popularity of TV set as a top choice of device for television consumption also aligns with the survey results of this study1.

Advanced TV is not affecting only the consumer but also all the players in the video entertainment industry, from broadcast and cable networks to production studios. The

1 See Chapter 4.1

6 increase in the number of new platforms and media content sources contributes to the total number of television programming produced yearly. This increase has recently started the discussion whether the industry has reached ‘Peak TV’, referring to the rapidly elevating number of available television content. According to the research department of FX

Networks, in 2015, there will have been 409 original scripted television series on broadcast, cable and online services. That number represents a record when compared to 375 scripted shows in 2014 and 211 in 2009. (Koblin, 2015) It should be noted that this number only represents scripted series, not unscripted shows such as game shows, reality television and news programs. Additionally the same study reported that online services, including

Netflix and Hulu, which had only 15 original scripted shows three years ago, ballooned to

44 this year. (Holmes, 2015) Industry leaders see the climbing number of content produced each year as the cause of declining ratings on cable and broadcasting. Max Benator, the senior vice president of multi-platform entertainment of RDF USA, says the prime-time viewership is dropping because other viewing options consumers have, are growing.

Benator discusses the increasing variety of options dividing big groups of audiences to

smaller ones. As more audience gets allocated in different ways of watching TV, prime time viewership of big networks decline. (Benator on TelevisionWeek, 2008) Similarly

John Landgraf, CEO of FX Networks, said “This is too much television.” and his general reasoning described in The New York Times as following, “Mr. Landgraf argued that the glut of programming was responsible, in part, for an industry wide trend in declining ratings, and that this volume of scripted originals would not be sustainable in the long term.” (Koblin, 2015)

The CEO of Ovation TV, Charles Segars, stated that a sizable amount of the

viewers have largely stopped watching networks at the scheduled time long ago. Today,

with a great amount of program choices and fast paced personal life style of the viewers,

people choose the most convenient way to consume their programs. Segars believes that

now, the schedulers are the ones who have to catch up with the viewers, not the other way

around. (Segars on TelevisionWeek, 2008)

2.3 The solution: Internet Ericsson ConsumerLab senior advisor Anders Erlandsson said, "The consumer is

looking for a solution that can offer them the freedom to choose what they want, when they

want it and how they want it. The user experience is in focus, rather than the technical

platform." (APB Magazine, 2015)

The one and only pipeline that can satisfy the consumer wants, named by Erlandsson

above, as the ‘solution’, is the Internet. Internet gives the TV audience an incredible

flexibility, personalization and control over their programs. Mobile devices made

television programs available to watch anywhere and anytime, with the addition of many

controls such as pause, fast forward, rewind and close captioning. There are two new trends

starting to appear related to this kind of audience control on online streaming sources. The

first one is the transition from “prime time” to “my time” which refers to audience’s choice

in when to watch TV. The second trend is “broadband on the go" which refers to audience’s

choice of where to watch TV (Marcus, Cereijo-Roibas & Sala, 2010), both will be discussed later in this study.

The Internet made way to a whole new TV distribution platform, Over The Top

(OTT). Today TV viewers have even more networks to tune in for their favorite TV shows,

such as Netflix, Amazon Prime Video and Hulu. After the success of Netflix original,

House of Cards, Standard and Poor’s analyst Tuna Anobi met with executives at Netflix to

talk about the future of OTT networks in the evolving media ecosystem. Anobi pointed out

that online streaming sources changing the traditional TV through creating quality original

content and providing multiple episodes for shows. (Yao, 2013) Unlike traditional TV,

OTT networks Amazon, Netflix, Apple, Hulu, Google and more can reach different

demographics at the same time. Eric Hippeau, managing director of Lerer Ventures, said

these companies are not only driven by creative process, but also by data; they have huge

amounts of data on each customer and they know exactly what the viewer likes. (Yao,

2013) For example if the audience tends to watch his/her shows back to back (binge

watching) Netflix knows to give the consumer only 15-20 seconds to make a decision

between quitting or continuing with the following episode. On top of that, if the customer

finishes all the episodes of a TV show, Netflix suggests more titles that would fit in the individual’s taste in programs. These suggestions are based on previously watched show and/or movie data. This level of personalization essentially does the research for the

consumer and lays out the results in a user-friendly interface, conveniently. Along with the addition of quality original programming that is comparable to those offered by premium networks and a wide program catalog, Netflix has managed to become one of the most popular networks.

Netflix CEO, Reed Hastings said in an interview with GQ, the firm’s goal “is to

become HBO faster than HBO becomes us” (Haas on GQ, 2013) Studies show that the number of consumers with streaming service subscriptions is growing. Nielsen data indicates that 40% of homes in the U.S. have access to one or more streaming platforms.

According to Barclays analysts, homes in the "most desirable demographics" and income levels are more likely to watch streaming content. (ValueWalk, 2015)

Netflix, with its 81.5 million subscribers worldwide (Q1 2016) is a very successful company, indicating the online streaming is the ‘next big thing’ in the television industry.

(Netflix Q1 2016 Letter To Shareholders, 2016) In 2015, CBS has launched stand-alone app, CBS All Access. Additionally, Comcast’s mobile application Xfinity TV Go keeps expanding and more networks and providers are following this trend each day. All these changes in the industry are pulling increasing amount of viewers away from their traditional TV environments and keep them from watching their shows during scheduled hours. The definitive proof of streaming’s takeover was provided earlier in 2011, by

Alcatel-Lucent’s solution development manager, Gary Fehr. Fehr announced that at peak times, Netflix accounts for as much as half of US Internet traffic. (Fehr on Dominion Post,

2011) Although, in 2015, Netflix bandwidth consumption dropped to 37% percent at peek times, it is important to consider that Netflix is constantly in competition with newly emerging streaming services for share. Todd Spangler reported that during the same

periods YouTube, Amazon Instant Video and Hulu accounted for 15.6%, 2.0% and 1.9% respectively. (Spangler, 2015)

2.4 Convenience Factors This study focuses on the factors that elevate the quality of the user experience and cause the shift from linear/traditional TV to the Internet supported platforms. The factors tested in this study referred as ‘Convenience Factors’ are Content Catalog and Original

Programming, Commercial Breaks, Cost, UI and Controls, Accessibility, Watch

Anywhere/Anytime, Time-shifting and Binge Watching.

2.4.1 Content Catalog and Original Programming As the content catalog grows the TV viewership grows with it. Consumers have the

option to pick and choose what to watch when they stream, unlike watching linear

television where they are limited by the network's schedule. More content attracts more

consumers because the choices look endless. ‘Watchathon Week’ is a Comcast XFINITY

event, where in 2014 the company made over 60 Million On Demand programs available

for its the customers to watch. After this event Andy Hunter, VP of Programming at

Comcast reported “Watchathon helped make April 5, 2014 historic for Comcast. Nearly 11

million hours of viewing happened on this day alone, making it the biggest day ever for

Xfinity On Demand.” (Hunter, 2014) This increase in the time spent watching TV

demonstrates that viewers tend to consume more content for a longer time when given

more choices.

Original programming is another valued addition to an OTT network’s catalog.

Such content is exclusive to the network and is often used as a strategic move to increase the number of subscribers. The success of the shows like Netflix’s ‘House of Cards’ and

‘Orange Is The New Black’, Hulu’s ‘Difficult People’ and ‘unReal’ and Amazon’s

‘Transparent’ and ‘Mozart in the Jungle’ is undeniable. All the shows listed above have won at least one prestigious television award whether it’s Emmys, Golden Globes or

another, along with being praised by viewers and critics. However there are two conflicting

views about the original content’s contribution to the network’s long-term success.

Although others followed closely, Netflix was the one to release the very first

successful OTT original with ‘House of Cards’. Trefis Team led by Wall Street analysts

see the quality original programming as a way for the networks to differentiate themselves

from the pack. “Competition is increasing in the online streaming space with players such

11 as HBO, Dish Network, Sony, CBS, and Comcast entering the market, in addition to

Amazon and Hulu…With most players offering competitive subscription rates, content compatible with mobiles and other handheld devices, and securing rights for popular TV series and movies, original content of high quality would be the key differentiator in this market to attract subscribers.” wrote Trefis Team. (Trefis Team on Forbes, 2015) On that note Trefis also points out that the high costs of acquiring original content causes shrinkage in the marginal profit of networks.

The other view on original content is rather negative. As mentioned in the introduction, today the competition in video entertainment industry is tight and a business level differentiation strategy is not viable since it’s easy to imitate other players in the market. Joel Espelien from TDG Research draws attention to the increase in the number of new original content being produced; 352 in 2014 across all platforms compared to 26 cable series produced in 1999. “This represents an incredible outpouring of content, which is fantastic for viewers. At the same time, there is an unfortunate reality in economics known as the law of diminishing marginal returns. Business strategies do not work forever,

as the most effective schemes are copied and augmented by competitors. As this happens, they lose their capacity for competitive differentiation.” wrote Espelien on his blog.

(Espelien on TDGResearch.com, 2015) Samantha Bookman built on top of Espelien’s discussion in her blog on FierceCable by noting that networks are not growing viewership.

The time spent on television consumption and the average number of shows being watched is relatively similar. Espelien said, as reported by Bookman “They're [networks] simply competing for a bigger slice of the "same viewing pie," because total TV viewing in the

U.S. has remained flat.” (Bookman, 2015) After discussing the issues related to the original

content strategy Espelien noted that ‘original strategy’ will become more important than

original programming as the competition gets tighter.

This study has found out the participators value ‘Wide Content Catalog’ 3.99 out

of 7 on the 0 to 7 importance scale. (0 is ‘Not At All Important’ and 7 is ‘Extremely

Important’.)

2.4.2 No-commercials As stated above networks invest huge amounts of money on production and

licensing of their content to be able to increase their viewership. It is critical that the paying

customer of the linear television is not the viewer but the advertising companies. Networks

and TV stations don’t sell television shows to customers but they sell eyeballs to advertisers. The number of viewers engaging with a show determines the price of the commercial spot during the run of that show. Therefore more viewership equals more revenue. Year after year commercial breaks have been getting longer and creating ‘ad clutters’. In 2009, for example, broadcast networks on average ran 13 minutes and 25 seconds of commercials per hour, according to data from Nielsen. In 2014, the average rose to 14 minutes and 36 seconds. Cable networks in 2009 ran an average of 14 minutes and 27 seconds of ads per hour, Nielsen found. In 2014, the average increased to 15 minutes and 49 seconds. (Steinberg, 2015) Naturally audience’s response to constantly increasing ad breaks is not on the positive side. A survey conducted by YouGov for Deloitte found although the 52% of the respondents have said television advertising is the most memorable compared to other mediums (radio, newspaper, digital video, digital banners), 86% of the participants said that they skip ads if they have the change on their DVR system. (Plunkett,

2010) A rather direct outrage by viewers occurred during 2016 Rio Olympics, when NBC

showed 14 minutes of commercials during the 40-minute event, in six separate breaks.

(Mediaite, 2016) Viewers took their voices to Twitter to express their frustration using the following hashtag: #nbcfail. (Yee on Variety, 2016)

Jeanine Poggi discussed on her article on AdAge that the TV consumer appreciates

the advertising that is relevant, however the surge in the viewership of ad-free video

services indicates that ad-free television is more exciting for the consumer. The results of

the survey conducted for this study aligns with Poggi’s discussion by showing a high

consumer valuation in no or less commercial television. Today, along with premium

networks such as HBO and Showtime, many online streaming sources offer ad-free TV

programming. Netflix and Amazon Prime Video offer ad-free programming with

subscription, while Hulu offers ad supported and ad-free options at different prices to its

customers. (Poggi, 2016)

Media leaders are aware of the changing nature of commercials and their place in

the new television experience. Donna Speciale, president of ad sales for Turner, Time

Warner talked about ad clutter: “What we all agreed to is that the experience has gotten a

little out of control.” (Speciale on Variety, 2016) Additionally some networks have already

started to experiment with new ways to keep viewers engaged during advertising. Networks

such as TNT and TruTV are reducing their commercial minutes, NBCU announced that

they will cut the commercials during its comedy show ‘Saturday Night Live’ by 30% in

the next season (Variety, 2016), SyFy has premiered its show ‘Magicians’ without

commercial interruption and more and more native advertising is being placed in the

shows. One example for new ways to include commercials within shows, that stands out is

from Fox’s hit drama ‘Empire’. Fox’s collaboration with Pepsi resulted in a soda

commercial integrated into the story arc of the show for three consecutive weeks. TV editor

Brian Steinberg (2016) talked about how this type of advertising affected the audience

behavior: A single ad starred “Empire” character Jamal Lyon in a Pepsi commercial that

he had been working on as part of the story arc. Viewers who wanted to soak up every bit

of the plot could not tune away or run to the kitchen to grab a snack.

Native advertising brings up the discussion of quality ad content. Dan Lovinger, executive VP-advertising sales, NBC Universal, points out that it is the engagingness of the ad content that will increase the value of commercials for the consumer; the problem is not the ad load. Lovinger said, “The commercial load discussion feels pervasive, but really it is TV waving the white flag of surrender...The real issue is people don't value the ads they are seeing." he also pull the focus on creating more engaging ad formats and exposing right people to the right ads. (Lovinger on AdAge, 2016)

Online streaming whether on an OTT network or a complementary on-the-go

service of a cable provider, manages to target consumers better than linear television can.

It is true that linear television can reach more people at the same time, but linear television

can’t compete with the data that is being collected through online sources and the Internet’s

ability to tailor commercials to the consumer’s likes and lifestyle. Randy Freer, president

and chief operating officer of Fox Networks Group also underlined the importance of

quality content over undervalued commercial load by saying, “We are looking at a number

of ways to try and create a better user experience...We are not in the advertising business.

It’s a revenue stream for us.” (Freer on Variety, 2016)

Finally, although many networks experiment with new ways to reach viewers with

commercials, media leaders still believe the evolution will be relatively slow when it comes

to the dependence on 30-second ad spots. Melissa Shapiro, president of investment at

MediaVest states that although there is some attention to new ways of advertising, it is still

incremental and it is not economically possible for all networks to abandon the 30-second

ad spots. Shapiro said the 30-second commercial spots are not going to disappear even in

the next decade because “Not everyone is going to be doing it on the advertising side and

not everyone is going to be able to do it on the TV side,” (Shapiro on Variety, 2016)

2.4.3 Cost A 2014 ‘Report on Cable Industry Prices’ put together by FCC showed that cable

TV service prices increased by a compound annual rate of 6.1% from 1995 to 2013 (Chief,

Media Bureau, 2014) — four times the rate of inflation. Despite the price increase, consumer satisfaction has declined during this time period: The Motley Fool reported that two of the leading cable TV service providers Time Warner Cable and Comcast have been placed last in a 2015 survey done by the American Customer Satisfaction Index scoring 56 and 57 respectively, on a scale of 100. (Bowman, 2015)

The FCC report mentioned above, presents the following data: 2005 average

pricing for ‘Expanded Basic Service’ is $22.35, same service is priced at $64.41 in 2013.

It should be noted that these prices don’t include hardware rentals and service fees that

come with the TV service and they don’t include bundled services such as Internet, Voice

or Home Security. The report also shows the change in the average number of channels

available in the ‘Expanded Basic Service’ as 44 and 159.6 in 1995 and 2005 respectively.

(Chief, Media Bureau, 2014) Although it seems fair that the price is increasing with the

number of channels becoming available, Figure 12 and Figure 23 below show that over

80% of TV customers watch only 10 networks or less and how the average number of channels watched compares to the channels available respectively.

Figure 1. Average number of channels watched in the US and Canada, Q$ 2015

On top of this, Senators Edward J. Markey and Richard Blumenthal released their

findings on the survey on video box rental fees. Results showed that 99% of customers rent

set top boxes from their multichannel video programming distributors (MVPD). On average renting a single set-top box costs $89.16 per year and the average number of set- top boxes rented to a household is 2.6, bringing the yearly cost to a whopping $231.82.

(“Markey, Blumenthal Decry Lack of Choice, Competition in Pay-TV Video Box

Marketplace,” 2015)

2 Digitalsmiths, 2014 3 McCarthy, 2014

Figure 2. Number of channels received vs. number of channels in the US, 1994-2013

The survey results of this study have showed that high pricing of MVPDs is the top reason for TV consumers are cutting the cord. Digitalsmiths report on monthly spending on OTT networks revealed that 47.5% of survey takers have said they spent between $6-

$11 each month. Same document also reported that 60.7% of survey takers spend over

$100 to their MVPDs. (Digitalsmiths, 2015) Evidently cost of having a cable or satellite service is almost 10 times higher than subscribing to an online TV provider, which is another reason to cut the cord for some viewers.

Nielsen has released the number of people living in households that have a hardwired cable TV subscription and the data shows a downward trend from Spring 2012 to Spring 2015, declining over 10 million people in these 3 years. (Nielsen Scarborough,

2015) Furthermore, Forrester Research has compared the numbers of cord-cutters, cord-

18 nevers and MVPD subscribers in 2015 and their estimation in 2025, as shown it the Figure

34. (Lynch, 2015)

Figure 3. Cable subscription in the US by age, 2015

All that considered, when the objective is to lower the cost receiving TV programming, cutting the cord might not be the best choice in the long run. First of all consumers still have to subscribe to an Internet provider, which is usually as same as their TV provider. In

2015, Consumers paid an average of $50 per month for broadband connection to the

Internet and the prices ranged from $10 to $120 based on location and speed. Additionally some consumers paid $5 to $10 router rental fees. (Lipka, 2015) The cord-cutters has to get hardware to run their OTT network apps such as Apple TV, Roku or Amazon Fire TV, priced between $49 to $99. (Bookman, n.d.) From that point subscription prices start to pile up such as Netflix at $9.99/month at minimum (Netflix.com, 2016), Hulu Plus at

$7.99/month and Amazon Prime at $99/year. (D’Onfro, 2014) If the consumer wants live

4 Retrieved from AdWeek, 2015

TV then there is Sling TV option, which starts from $20 and goes up to $40 per month.

(Sling.com, 2016)

As shown, a TV experience that is equal to Comcast Xfinity or Verizon Fios can be achieved by cutting the cord however it would cost nearly as much as a TV, Internet and Voice bundle which starts from $99/month for Xfinity (Xfinity.com, 2016) and

$110.99/month for Fios. (FrontierBundles.com, 2016)

2.4.4 User Experience

2.4.4.1 Content Discovery

There is a huge amount of TV content available for viewers to watch. This creates new challenges for programmers to overcome, such as how to place a show not just on a timeslot but also on a well laid out user interface. Increasing use of online streaming platforms proves that the cord cutters make up a big portion of the television consumer base and their needs are impossible to ignore.

Viewers who receive their television programming through a cable or satellite

provider have been enjoying the convenience of Interactive Program Guides (IPG) to find new channels and shows to watch. In 2015, 40.3% television watchers said they use a programming guide to determine what to watch. (PwC, results showed on Statista, 2015)

Recently personalized program discovery is gaining traction among users. In 2013,

Digitalsmiths study has found that 55.3% of the viewers ‘sometimes’ feel frustrated when they try to find something to watch, meanwhile 8.6% of the viewers said they ‘always’ feel frustrated. (Digitalsmiths, 2013) In 2016, 20% of overall TV viewers (linear and advanced

TV, 3,114 adults in the US and Canada) said they would like their channel guide to be changed, so that it’s sorted or categorized into groups/lists of TV shows or movies. (e.g.

‘What’s on now’, ‘Because you watched this…’, ‘Live Sports Now’); 39% of the

respondents of the same survey also said they would like these categorizing features but

they would also like to keep both types of guides. Data also shows millennials are adapting

to the new content discovery methods faster than the older consumers. 68% of the

millennials said they would like a new TV guide, while 56% non-millennials have said

they would like categorization and recommendation from their TV guides.

(MarketingCharts, 2016) Additionally in 2016, 76.7% of the viewers who have access to

recommendations reported that the recommendations were ‘sometimes’ accurate/relevant and 17.6% have said the recommendations were ‘always’ accurate. The report shows the accuracy has increased by 10% from 2014 to 2016. (“Digitalsmiths’ Q2 2016 Video Trends

Report,” 2016) As the data shows the easy content discovery is a valuable feature for the

consumer. Providing recommendations based on consumer behavior data is possible

through online platforms and VOD systems but it’s still not very common among smaller

MVPDs. Based on the data collected and analyzed, Digitalsmiths have concluded that there

is a consistent trend, observable quarter-by-quarter, showing a large population of

respondents who get frustrated “always” or “sometimes” when trying to find something to watch. Digitalsmiths also pointed out that the viewer should not have to work to find the content, but rather the content should find the viewer and the personalization of television is the key to the future. (Digitalsmiths, 2013)

2.4.4.2 Controls

In February 2015, 33% of 1,200 respondents between ages 16-74 have said the reason they watch time-shifted television is the ability of pause and rewind.

(MarketingCharts & Various sources (Hub Entertainment Research), n.d.) DVRs have

made pause, replay, rewind and fast forward features possible for consumers since late

1990s. DVR is still the second most popular way to watch TV, after live broadcast, by 33%

usage among 18-34 year olds and 37% usage among 35-58 year olds. (Forrester Research,

& Business Insider, 2014) Additionally 76% of 13-64 year olds have reported that they use their fast forward feature of their DVRs when commercials come on. (GfK, 2015) Although

DVRs are still relevant for many consumers, the growth of DVR users (3% growth) is

staggering compared to OTT networks (19% growth). (“We’re Now Streaming And DVR-

ing Equally (While Forsaking Live TV),” 2016) Nielsen has announced this year that the

subscription video on demand penetration has caught up with DVRs at 50%, see Figure

45. (Nielsen Corp., 2016) As data shows SVOD services have the features that can compete

with DVRs, mainly the time shifting, playback and fast forward options. Many streaming

services already have or just releasing their no-commercial tiers such as Hulu and CBS All

Access which enables customers to pause, rewind and fast forward without even coming

across any commercials.

5 Nielsen Corp., 2016

Figure 4. Access to DVR and SVOD services in the US, Q1 2016

2.4.5 Accessibility Television is for everyone, which brings up the discussion about accessibility.

Under the Twenty-First Century Communications and Video Act of 2010 (CVAA), local

TV station affiliates of ABC, CBS, Fox and NBC located in the top 60 TV markets (as of

July 1, 2015) and top five non-broadcast networks Disney Channel, History, TBS, TNT

and USA are required to air 50 hours of described video per calendar quarter, 4 hours each

week for visually impaired audience. (Federal Communications Commission, 2012)

Comparatively, Netflix offers over 180 audio described TV shows, movies and

original content including Criminal Minds (TV Series), House of Cards (Original

Programming), Lee Daniel's The Butler (Movie), Making a Murderer (Documentary).

Apple iTunes provides video description for over 300 movies and Disney Movies

Anywhere and Watch ABC Apps offer some of their movies, series and live content with

audio description although the description is only available through the app. (American

Council of the Blind, 2016) In this case it is not possible to say OTT networks have the

upper hand when it comes to described video content there are still many online streaming

services without any video description, some examples are Amazon, Crackle, Sling TV,

Hulu, YouTube Red, HBO Now and Google Play.

Unlike described video, closed captioning is offered and used widely. Closed

captioning on television is regulated in the US. Congress requires video programming

distributors (VPDs) - cable operators, broadcasters, satellite distributors and other multichannel video programming distributors - to close caption their TV programs. (Federal

Communications Commission, 2011) Closed captioning is also available for audiences who are using streaming sources such as Netflix, Hulu, Amazon, iTunes and more.

Moreover live streaming engines such as Wowza using cloud to turn any camera footage into a live stream, offer the addition of closed captioning of the content.

When analyzing accessibility modern MVPDs, media players and streaming services bring more than just video description and close captioning to the table. Comcast

X1’s voice guidance, Apple TV’s tvOS Accessibility features and LG’s voice controls are making TV content more accessible for people with disabilities. It is not easy to compare

linear TV and streaming based on accessibility because there are lot of other parts involved, including set top boxes, multimedia players and even TV set itself.

2.4.6 Watch Anywhere Watching TV on the go is impossible without the Internet connection, unless the user has a mobile device with an antenna that can pick up over the air broadcast signals.

Netflix users have been enjoying the TV Everywhere6 before the pay-TV subscribers. In the past years networks and MVPDs have been releasing their online apps to stay relevant

6 Referred as ‘TV Anywhere’, ‘TV on-the go’ or ‘Mobile TV’

in the Advanced TV landscape. Subscribers can go to their MVPD’s or a network's

website/app and log in with their cable or satellite subscription to access to thousands of

TV content. Reed Hastings, the CEO of Netflix said TV Everywhere is the most

fundamental threat for Netflix and explained “You get all this incredible content that the

ecosystem presents on demand for your same $80 a month. Yet the inability of that

ecosystem to execute on that, for a variety of reasons, has been troubling.” (Gerry Smith,

2015)

The overall (reached through browser, iOS App, Android App, Gaming Console

and OTT) TV Everywhere authenticated7 video has showed 246% growth from March

2013 to March 2014. Additionally the share of Pay-TV subscribers who set up TV

Everywhere accounts and authenticate has grown by 31% over the last six months and 21%

of U.S. households subscribe to Pay-TV access TV Everywhere content. (Adobe Digital

Index Q1 2014, 2014)

Ernst & Young’s Jeff Stier and Chris Gianutsos analyzed the trends directing the

future of television; mobility of content is one of these six new trends. “As the cost of video

screens declines, the demand for content mobility will rise exponentially. With a

smartphone serving as the nerve center for the screen world, content will be able to follow

a consumer from device to device, location to location.” (Stier and Gianutsos, n.d.)

Furthermore the duo believes the content mobility that leads to hyper personalization of the television experience will create opportunities for advertisers. Stier and Gianutsos wrote, “Although content mobility creates a number of back-end headaches, it also creates

7 Accessed by using cable/satellite log in

new opportunities for ad impressions, provided they are properly targeted and calibrated

for a multiscreen lifestyle.” (Stier and Gianutsos, n.d.)

Although TV Everywhere is a great opportunity to take the cable content out of the

living room, many users are not aware of this convenient feature that comes free with the

cable and satellite subscription. A survey among TV consumers who had an MVPD

subscription and watched at least five hours of TV per week revealed that 47% of the

respondents ‘never heard’ of TV Everywhere and 9% have only ‘heard of it’, the group

that said they have a ‘very strong’ familiarity with TV Everywhere only made up 12% of

the respondents. (Various sources (CTAM), 2014)

The idea of taking the television content out of the set-top box has been brought into discussion by Tom Wheeler. On January 27, 2016, FCC Chairman Wheeler's office has announced a proposal that can possibly initiate the end of traditional cable and satellite systems by unlocking set-top boxes. "The proposed rule would require cable and satellite providers to give alternative device makers - their eventual competitors - access to cable and satellite programming." explained Reuter's Clarece Polke. (Polke, 2016) The document

states following: "…consumers should be able to have the choice of accessing programming through the MVPD-provided interface on a pay-TV set-top box or app, or through devices such as a tablet or smart TV using a competitive app or software." (FCC

Proposal to Unlock the Set-Top Box, 2016) The proposal has passed on February 18, 2016.

When talking about the ruling, FCC Chairman Tom Wheeler strongly emphasized on the app-centric approach to TV consumption and argues that the new system will encourage innovation, give consumers the power to choose the device they use to watch programming,

cut costs by eliminating set-top box rental fees and empower independent and minority

content.

2.4.7 Watch Anytime (Time Shifting) Time shifting is one of the conveniences of Advanced TV, which is possible

through streaming or on demand services. Naturally with the personalization of the content,

TV consumption has become an individual and personal experience. Eric Bruno, VP at

Verizon for FiOS, stated “Streaming brings an opportunity for personalization. There's

definitely going to be some cannibalization. Five years from now, we'll see a hyper-

personalized ecosystem.” (The Online Reporter, 2013) This brings back Katz’s view of the

television today. Katz says the television we knew in 60s and 70s is dying and the

television’s “sharedness” no longer exists. (Katz, 2009) The CEO of Akimbo, Tom Frank

joins Katz’s perspective and questions the meaning of the “prime-time” in today’s world.

He states that the viewers like to schedule their own prime time via DVRs and online

streaming, unless, he also adds “Kobe is shooting a basketball in the NBA Playoffs or Jason

is dropping the lyrics of a Bob Dylan Classic on ‘American Idol’” (Akimbo Frank on

TelevisionWeek, 2008)

Although the personalization of television experience has enabled time shifting

which lets viewers to fit their favorite shows into their daily schedules, viewership on

network appointed schedule is far from its demise. The number one type of television

programming that is defending the popularity of live coverage against the convenience of time shifting, is sports. Fans don’t want to miss a single play as it happens live and want to see the score as soon as the game ends. Networks such as ESPN provide more than just full-length games but also knowledgeable commentary, game statistics, exclusive

interviews and inspirational stories about players. Even if the ESPN coverage is available

via online live streaming service Sling TV, viewers still can’t access all the media without

a traditional cable subscription. A survey commissioned by One World Sports found that

39% of consumers who have cut the pay-TV cord within the last two years but expressed

an interest in subscribing again have said sports channels are their reason to return.

(Umstead, 2015)

Moreover Twitter, Tumblr, Facebook and many other social media sites enable and

even encourage their users to discuss their favorite programs in real-time. Many TV shows are ‘trending’ on social sites make the fans want to get involved in chatter while the first- run of these shows are still going on, on its network scheduled time. This need for communicating with fellow fans and having interactions revolving around their favorite

TV programs push the viewers to watch the shows on the scheduled time.

Nielsen Media reports that media multi-tasking is constantly growing and 57% of

users are going online (on a second device) while watching TV. Shows like American Idol

(garnering 178 million+ SMS messages in 2008) and mobile applications like ESPN

ScoreCenter have also turned the mobile into an essential TV-watching companion.

(Horozov, Narasimhan, Wickramasuriya, & Vasudevan, 2010) This consumer behavior is

called second screening. Molly McHugh from Digital Trends explains this concept in her

article as follows: “Second Screen generally refers to an application that complements your

TV viewing. These apps can be social, but they aren’t necessarily. Lots of second screen

apps allow you to dive deeper into the experience. For instance, ESPN app that shows you

the stats of who’s playing, or apps for TV series that dive into the world of the characters.”

(McHugh, 2015)

A new trend blooming out of social media and second screening is “buddy

awareness”, which refers to the occasion where audience knows which of their friends are

online and what they are watching. (Ferguson et al., 2008) Comcast recently introduced

the new version of Xfinity TV, which allows the users to connect their Facebook accounts

with their e-guides and see what is trending among their friends and decide accordingly.

(Leo, 2011)

2.4.8 Binge Watching There are discussions of whether binge watching is a fun activity to spend time or

a dangerous addiction. No matter which one, binge watching is definitely one of the new

television habits that managed to creep into audiences’ daily life. A 2014 survey found,

some 84% of trailing millennials and even 37% of those over 68 years old engage in binge-

watching TV series. (Deloitte, 2015) Moreover, a study conducted by Netflix showed that

subscribers who finish the first season of a show generally do so in a week and are

dedicating a significant amount of time to do it: They watch about two hours a day. (Koblin,

2016)

Netflix’s business model makes many episodes of shows available at once has

initiated this new television culture. “Entertainment is fast becoming an all-you-can-eat

buffet. Call it the Netflix effect.” (Mudhar, 2013) An example of Netflix’s success in tying

audiences to their screens is the release of the new season of Arrested Development. 10%

of Netflix viewers have finished all 15 episodes of the show within the first 24 hours of its

release. (Wallenstein, n.d.)

Although Netflix is the initiator of this new trend, other media outlets are following

suit by launching subscription based all you can watch, read and listen services. Broadcast

and cable networks are adjusting their programming and scheduling to be more binge-able.

Some examples are Viacom’s TV Land, the network that makes changes to storylines of

its shows to encourage binge watching and TBS, the cable network that had a 24-hour, 10-

episode special of its comedy show ‘Angie Tribeca’. (“ValueWalk,” 2016) Similar to

online streaming sources, MVPD’s VOD services motivate the binge watching behavior.

Comcast Xfinity has been offering a binge-watching event called ‘Watchathon’, a

weeklong access to over 250 shows from over 80 networks. In 2015, a total of 56 million

hours of video have been watched across all platforms in just a week during ‘Watchathon

Round 4’. (Hunter, 2016) Streaming sites, video on demand services, DVDs and even live

TV are enabling content hungry audience to binge on their favorite shows, but DVR is on

top of the binge watching sources. In 2015, 73% of TiVo subscribers have said they use

their DVR to watch at least 3 back-to-back episodes, while only 60% said they binge watch

on Netflix. (TiVo, 2015)

The data provided above confirms the popularity of binge watching, but some

people question the health effects of this trend. Yoon Hi Sung, Eun Yeon Kang and Wei-

Na Lee, researches from University of Texas have found links between binge watching and

feelings of loneliness and depression. Survey takers between the ages of 18 and 29

answered questions of how often they watched TV, how often they had feelings of

loneliness, depression and self-regulation deficiency; and finally on how often they binge-

watched TV. The results showed that the more lonely and depressed the study participants

were, the more likely they were to binge-watch TV, using this activity to move away from negative feelings. (International Communication Association, 2015) Researchers Sung,

Kang and Lee also pointed out that their study has found correlation, not causation between

depression and binge watching. (“Benzinga: Researchers Link Binge Watching With

Depression, Anxiety,” 2016)

While there is no certain evidence connecting depression and loneliness to binge

watching, the negative effects of watching television for long hours have been proven.

Researchers Frank Hu and Anders Grøntved found a linear increase in risk with the number of hours per day of TV viewing for both type 2 diabetes and cardiovascular disease. This

association with all-cause mortality appeared stronger with TV viewing time of greater

than 3 hours per day. For each additional two hours of TV viewing per day, the risk of

type 2 diabetes, cardiovascular disease, and premature mortality increased by 20, 15, and

13 percent respectively. (Grøntved A & Hu FB, 2011)

Since binge watching is a widely popular, yet a relatively new entertainment trend,

it is difficult to research the long-term effects, however binge viewers continuously share the negative effects of the habit. In 2015, a survey conducted among 12,458 TiVo subscribers found 52% of the participants felt sad after finishing a show they binge watched, 37% spent entire weekends binging and 31% lost sleep due to binge watching.

(TiVo, 2015)

Health effects aside, even the industry analyzers and leaders can’t agree if binge

watching is in the future of television. On one side, a global study conducted by Edelman

found that 88% of the participants said they want to watch more than one episode of their

favorite shows at a time. (Pomerantz, 2013) Therefore, binge watching is here to stay

because viewers desperately needed an excuse to mentally check out and binge watching

gave them an excuse to do so. (Kimball Leslie, n.d.) On the other side, Jenji Kohan, the

creator of widely binged watched show ‘Orange Is The New Black’, said that “One of the

greatest aspects of enjoying a television show is sharing that experience with other fans

and binge watching has removed that pleasure by making it a race to see who can finish

the series the fastest rather than everyone being at the same pace.” (Van Der Wall, 2015)

In a summary, the popularity of binge watching is undeniable but the future of the habit is still in discussion.

2.5 The Future of Television - What’s Next? Prolux and Shepatin’s vision of the future of television includes mobile devices that

can collect data for a better understanding of their user’s habits. According to Prolux and

Shepatin, mobile phones contain location information (e.g., GPS), sensors (e.g., accelerometers), information about contacts (e.g., when and where they are accessed), billing information, etc. The next paradigm shift is to combine this personalized information and predictive analytics (e.g., gender, age, vocation, and commute patterns) with information about consumption patterns and interests from set-tops and personal computer usage. They mention that the smart mobile devices already are able to control one’s DVR from distance. (Prolux and Shepatin, 2012)

This type of data collection and behavior tracking poses a great opportunity for advertisers because it allows better targeting. On the other hand viewers will not sit through minutes of commercials for products they don’t care about. Poggi offers a scenario involving the popular ABC drama ‘Scandal’: “...The whole thing looks a lot like the TGIT8

drama, with Olivia wearing her metaphorical white hat and fixing yet another White House

scandal, but she is doing all of it with the help of her Samsung Galaxy. Not so

8 ABC’s Thursday Night primetime drama block

32 coincidentally, you are actually in the market for a new smartphone. The rest of the show is commercial-free.” (Jeanine Poggi, 2016)

Netflix CEO, Reed Hastings suggested an app-based streaming TV ecosystem in the future. Hastings also noted that the entry barriers are dropping and it creates a threat against all the firms in the TV entertainment industry and the only way for survival is to transition from a traditional television to Internet based television. Hastings said: “The great thing about the Internet is if you can build an app for the iPhone or the Android, you can be a TV network”, he also emphasized on the increasing importance of the story

"connect the world... so the world's best storytellers can get to a global voice." (Benzinga,

2015)

2.6 Significance of this study Drawing from the literature referenced above, there is one conclusion: Television experience is changing. Television is becoming more personal and mobile, online streaming is gaining more popularity each day and apps are becoming more important due to the recent, rapid technological developments. All these changes affect the way TV content is delivered, commercial structures, storylines and habits of the TV audience. It is important to understand how these habits are changing to be able to maintain desired viewership and strategize efficient methods to reach more consumers.

The information above says a lot about how TV and the TV audience is changing, but it is still not enough to understand why people make the choices between different platforms. It is also crucial for the reader to understand that even the trends mentioned in this study will eventually change with the newly emerging technologies. This research hopes for results to shed some light on personal reasons behind the changing television

33 consumption behavior by looking at different demographics and how they value a variety of convenience factors of the Advanced TV.

CHAPTER 3. METHODOLOGY

3.1 Introduction

The purpose of this study is to investigate the effects of IPTV on television watching habits, focusing on the reasoning behind the choice between linear TV and other platforms.

The data for this study has been collected via an online survey of 1,127 participants

(1,014 complete, 113 partial). Survey takers asked to answer 13 main questions, some of which parented to a number of other related questions. The responses have been recorded

by using various survey question types to let the respondents express their thoughts as

accurately as possible.

3.2 Hypothesis

H1:“As the online content category grows, fewer consumers watch television programs on

their scheduled time.”

H2:“Viewers choose to consume TV programs via online sources because they have more

control over how to play their content”

H3:“Viewers choose to consume TV programs on other platforms because it is more

affordable.”

H4:“Viewers choose to consume TV programs via online sources because it fits in their

daily time budgets (their daily schedule) better than linear TV”

H5:“Viewers choose to consume TV programs via online sources because the user interface of the source is more consumer friendly.”

H6:“Viewers choose to consume TV programs via online sources because they can connect their devices to each other”

3.3 Research Questions

1. How many of the participants have at least on television set with cable/satellite or OTA

access in their household? (H1 through H6)

2. How much time viewers spend watching TV programs daily? (H1, H4)

3. Where does TV watching activity fit in their daily time allocation? (H4)

4. What devices does the viewer use primarily to watch programming produced for

television and/or original content produced for streaming? (H1 through H6)

5. What are the most popular TV consumption habits? (H1 through H6)

6. Why does the sample audience group choose to watch on other platforms instead of

linear television? (H1 through H6)

7. Is there a correlation between the annual household income and preference of TV

provider? (H1 through H6)

3.4 Method

1. An in-depth research has been done using trade articles, previous academic researches,

consumer surveys, journals and official FCC documents. The initial research results

have been shown in the Literature Review section of this study.

2. A rough draft of the survey was created with potential questions to be able to answer

the research questions 1 though 7. This draft has been tested with peers and faculty.

After testing, the initial survey has been adjusted based on the results and written

feedback. The final version has been created using Qualtrics with sample size goal of

1,000 responses.

3. The first round of the survey distributed through the following social media networks:

Facebook, LinkedIn and Twitter. Individual links also have been sent to peers and

faculty members.

4. The second round of the survey has been posted on Reddit, Imgur and Craigslist.

5. The third and final round of the survey has been assigned to paid survey takers using

Amazon Mechanical Turk9 to be able to reach the sample size goal.

3.5 Design of Instrument, Data Collection and Analysis

The data for this study is collected via an online survey only. The survey is composed of questions created by the researcher and selected from Qualtrics question bank.

Later the survey has been tested on a small sample group to ensure that the questionnaire is organized in the best possible way to reflect the participant’s perspective. The reviewed survey has been sent out to 1,000+ participants to include all the demographics representing the variety in the following: age, ethnicity, household income, weekly leisure time, weekly time spent watching TV, devices in the household and commonly used media devices.

The survey questions have been separated in to three main categories:

Demographics, Habits and Convenience Factors. ‘Demographics’ category (survey

9 Amazon’s service that provides individuals to complete tasks using human intelligence for pay, in this case used for survey taking.

questions 2 through 12) is created to know the respondent better and to match their demographical data with their TV consumption habits later via crosstabs method. The

question types used in this category are: multiple choice, free text and constant sum to

100%.

The ‘Habits’ category (survey question 13) is created to understand the consumer

behavior during TV consumption. This category focuses on the following concepts: cord

cutting, time shifting, binge watching, TV everywhere, pause/play, buddy awareness,

social TV and second screening. In this category the respondents have been asked to use a

1-7 scale to rate the scenarios given, based on how likely these scenarios are to the

respondent’s own TV consumption experience.

‘Convenience Factors’ category (survey question 14) is designed to extract the

reasons of the respondent to choose IPTV. This category includes the following concepts:

content control, content catalog, cost, customizability, time budget, upgradeability, social,

binge-friendly, accessibility and user interface. In this category the respondents have been

asked to use a 1-7 scale to rate the importance of various qualities of IPTV.

The respondents then asked permission to be contacted to do a one-on-one

interview, however the time limitation and budget spared for this study has made it

impossible to have personal conversations with the respondents. The researcher has

concluded that the survey results will be sufficient to answer the research questions listed

above.

CHAPTER 4. FINDINGS

4.1 Research Question: “How many of the participants have at least one television set

with cable/satellite or OTA access in their household?”

Participants asked to select all the devices they own including a traditional TV where they use some type of cable/satellite provider or OTA to receive their TV programming. Out of 1,127 participants 76.6% indicated that they own a traditional TV set.

Meanwhile top devices in households were personal computers and smart phones with 92.1% and 83.2% respectively. Table 4.1.1 shows data for all devices.

Table 4.1.1 Survey Question: “Which of the following electronic devices do you own?” Answer % Count Laptop/PC 92.08% 942 Smart Phone 83.19% 851 TV set (Traditional TV) 76.64% 784 Tablet 61.97% 634 Multimedia console (Xbox, PS4, etc.) 48.19% 493 Media Streaming Players (Apple TV, Amazon Fire Stick, 43.40% 444 Chromecast, Sling TV, Roku Box, etc.) Smart TV 35.87% 367 Other 0.98% 10

Even though nearly all participants have indicated that they own one of the devices above only 87.76% (989/1,127) of them said they watch TV using online platforms such as streaming apps and web sources. 12.24% (138/1,127) of the survey takers have said they either only watch linear TV or do not watch TV at all.

Demographic data indicates that the ratio of respondents who watch TV on online platforms to those who only watch traditional TV or no TV at all is the highest among 18-

24 year group. This ratio follows a declining trend as the age brackets raised, demonstrating

39 that the majority of the online TV audience is composed of consumers under 34. Table

4.1.2 displays the age demographic data vs. IPTV consumption.

Table 4.1.2 Cross tabulation showing the age vs. IPTV and Traditional TV consumption

Do you watch TV on online platforms? (IPTV, TV Streaming) Yes No Ratio Total

Under 18 4 0 — 4 18-24 226 15 15.1 241 25-34 430 29 14.8 459 How old 35-44 197 32 6.2 229 are you? 45-54 87 29 3.0 116 55-64 38 23 1.7 61 65 or 7 10 0.7 17 over Total 989 138 7.2 1127

The respondents who said they watch TV on online platforms have the average annual household income of $60,095.87, meanwhile the respondents who only watch traditional TV or do not watch TV at all have the average annual household income of

$57,398.15. There is no statistically significant difference observed among the different income levels.

4.2 Research Question: “How much time viewers spend watching TV programs daily?”

Participants were given the following choices to select, to indicate their daily TV consumption in hours: Less than 2 hours, 2-4 hours, 4-8 hours and More than 8 hours. Most popular answers for this question are ‘Less than 2 hours’ with 44.18% and ‘2-4 hours’ with

42.82%. Only 13% of the participants have said they watch more than 4 hours of TV daily.

4.3 Research Question: “Where does TV watching activity fit in their daily time

allocation?”

To indicate the amount of leisure time they have in a day, participants were given the same choices as they have in the daily TV consumption question. The purpose of offering the same choices to the respondents is to make the comparison easy by keeping the scale constant. 79% of the participants have said they have between 4-8 hours of leisure time in a day. Table 4.3.1 shows how the survey takers fit TV consumption in their daily leisure time.

Table 4.3.1 Cross tabulation of daily leisure time vs. daily hours spent watching TV How many hours of TV programming do you consume in a day? More Less than 4-8 2-4 hours than 8 Total 2 hours hours hours Less than 2 124 (88%) 12 (9%) 3 (2%) 2 (1%) 141 hours How many hours of leisure time 2-4

253 (51%) 223 (45%) 17 (3%) 4 (1%) 497 do you have in a hours day? 4-8 67 (21%) 174 (56%) 69 (22%) 2 (1%) 312 hours More than 8 8 (11%) 29 (40%) 23 (31%) 13 (18%) 73 hours Total 452 438 112 21 1023

4.4 Research Question: “What devices does the viewer use primarily to watch

programming produced for television and/or original content produced for

streaming?”

There are tens of various devices that the audience uses to consume television programming. To be able to answer this research question, the survey takers have been asked to specify the percentage of programming they watch on each device, summing up to a 100%. In the survey these devices have been grouped under generalized categories to make the answering process more manageable for the respondents. These categories are:

Traditional TV set, Smart TV, Laptop/PC, Tablet, Smart Phone, Multimedia Consoles and

Media Streaming Players.

Based on 1,023 responses and the mean of 32.2%, most of the TV programming is still being watched on Traditional TV Set; Laptop/PC is ranked second with the mean of

21.7%. Media streaming players such as Apple TV, Amazon Fire Stick, Chromecast and

Smart TVs have delivered a total of 18.2%, meaning the audience is not just consuming

TV traditionally or on websites but also by using OTT mobile applications. High

standard deviation shows the big range among the percentage allocation for each device.

For example, even though TV set has the highest mean there are a lot of survey takers who do not watch traditional TV or only watch traditional TV, however the means of the percentages assigned by the survey takers brings traditional TV (TV set) to the top.

Table 4.4.1 shows the percentages of TV programming watched on different media devices.

Table 4.4.1 Percentage allocation of TV programming consumed using various devices

Device Mean of percentages St. Dev TV set (Traditional TV) 32.18 34.95 Smart TV 15.08 27.82 Laptop/PC 21.68 29.02 Tablet 4.91 11.58 Smart Phone 5.83 11.68 Multimedia console (Xbox, PS4, etc...) 7.05 17.83 Media Streaming Players (Apple TV, Amazon Fire 24.22 Stick, Chromecast, Sling TV, Roku Box, etc...) 13.14 Other 0.82 8.09

4.5 Research Question: “What are the most popular TV consumption habits?”

Understanding how the audience behaves when watching TV is crucial for

programming and scheduling. As mentioned in the ‘Literature Review’ section the TV

watching trends are constantly changing and the OTT networks, multiple devices and social

media have considerable effects on TV audience habits. To be able to find the most popular trends and habits, the survey takers have been given various scenarios and asked to rate them based on the likeliness to their personal TV consumption experiences.

The highest rated (most likely to audience experience) trend is receiving TV programs through online sources with the mean of 4.71 on a 0-to-7-scale. Survey takers also highly rated watching original programming produced by online TV sources (mean of

4.51 out of 7). Conversely to the OTT original programming, survey takers have indicated that they also watch network programming but they use on demand services or online sources to be able to watch them later (mean of 3.85 out of 7).

The current TV technology enables viewers to have more control over their content.

Audience can pause, rewind and fast-forward the content with the click of a button. The survey respondents have said that they often pause their TV (mean of 3.94 out of 7) and use rewind and fast-forward features (mean of 3.62 out of 7).

Table 4.5.1 shows how the respondents rated TV related social interaction on the

0-to-7-scale.

Table 4.5.1 Social media interaction about TV programming Social TV Behavior Mean St. Dev I'm active on social media while I'm watching TV programs. 2.63 2.40 I often read and/or write blogs about TV programs. 1.25 1.87 I live tweet during TV programs. 0.95 1.67

4.6 Research Question: “Why does the sample audience group choose to watch TV on

platforms other than linear television?”

The concept of ‘Convenience Factors’ has been introduced earlier in this study.

This concept has been created to define the possible reasons that the audience has, to choose

IPTV over traditional TV. The survey takers asked to rate the importance of various convenience factors on a 0-to-7-scale where 0 is ‘Not At All Important’ and 7 is ‘Extremely

Important’.

Based on the 1,016 answers, ‘Low Cost of TV Service’ has been rated highest on the importance scale with the mean of 5.48 out of 7 (St. Dev.: 1.77). Figure 510 shows the

mean importance rating of each convenience factor as assessed by the survey participants.

Respondents also asked to fill in the provided space if there is any other factor that

is important to them and is not listed by the researcher in the question. Some answers typed

in by the respondents that appeared multiple times were following:

• Picture quality/Ability to adjust the picture quality

• No content expiration/Consistent catalog

• Programs that are not available via satellite/cable services (foreign and/or niche

10 See complete statistics table in Appendix 2, on page 70

programming)

• Dissatisfaction with major telecom providers

Figure 5. Mean importance ratings of convenience factors as reported by the survey

participants

4.7 Research Question: “Is there a correlation between the annual household income

and preference of TV provider?”

A correlation analysis has been done with 997 responses that pair the estimated annual household income of the survey takers with how highly they value ‘Low Cost of

TV Service’. The result of Pearson correlation of -0.085211 indicates that there is no correlation between the income and the choice of low cost TV service.

CHAPTER 5. CONCLUSION

As stated in the ‘Literature Review’ section, in 2009 Elihu Katz has said,

“Television is dead.” (Katz, 2009) Evidently television is still around today but it has

changed almost completely from what it was in the 1990s, even 2000s. Internet has rapidly

altered the nature of TV consumption and turned it into a personal experience. This has

created the need for customizable systems that can be adjusted accordingly to each

individual’s preference. This study has identified these preferences and collected data on

how important they are for the consumer. Understanding consumer considerations when

choosing a TV platform is the key to finding ways to enhance the viewer experience.

The survey data has shown that the sample group spends over 50% of their daily

leisure time watching TV. Even though 32% of TV programming consumption still occurs

only via traditional distribution of content, such as cable, satellite and over-the-air, the remaining 68% is received through online platforms, mainly Laptop/PC and media

streaming players. This drives attention to online sources: OTT networks, streaming

applications and online on demand services. Increasing Internet speeds have given such

online sources the upper hand over traditional television in terms of convenience,

customizability and content availability without the cost of leading cable and satellite

providers. This being said some TV and Internet providers have been developing

technologies to match the features of online sources. These recent technologies include but

not limited to following: digital guide, on-demand library, cloud DVR and voice controlled remote systems, ‘Watch Anywhere’ and similar online services to complement the traditional delivery of content. Although these features are creating an upscale TV

watching experience for audiences, they are generally come bundled in expensive packages

compared to online sources like Netflix, Hulu and such.

Survey data has shown that the sample audience group values the ‘Low Cost of TV

Service’ the most (mean of 5.48 out of 7). Additionally information has revealed that there

is no correlation between how much money the consumer makes and their valuation of low

cost TV service. In other words, the household income does not have any effects on the monetary amount that the consumer wants to spend to receive TV programming.

The second most important feature for the sample group audience is ‘none and/or shorter commercial breaks’ (mean of 5.20 out of 70). As mentioned above over 50% of the leisure time is spent watching TV and the viewer wants to make the most of this time with limited interruptions. This is yet another feature that the traditional TV does not possess.

Since TV networks make most of their money by selling eyeballs to advertisers, it is hard

for national and cable networks to keep their revenue stream without commercials. OTT

networks have solved this problem with monthly subscription fees (e.g. Netflix, CBS All

Access and YouTube Red) or a combination of limited commercial time and monthly fees

(e.g. Hulu).

Finally, the sample audience group has indicated that the features giving them

control over their content are important for them. Control options and easy to navigate user

interface have been highly rated on the importance scale when watching TV. That being

said ‘Customizability’, meaning the personalized recommendations; playlists and wish lists

did not score as high on the importance scale (mean of 3.5 out of 7).

TV consumption habits, binge-watching and time-shifting have been included in trying to analyze the consumer choices in TV service providers. Although binge watching

scored relatively high on the importance scale with the mean of 4.4 out of 7, time-shifting

and schedule conflicts have scored below 3.5 out of 7.

In conclusion, it has confirmed through this study that the top reasons in choosing

IPTV over traditional is because it fits better to the consumers newly developing TV habits,

more specifically, controlling the content (e.g. pause, fast forward, rewind…), navigating

through a digital interface to find content to watch and to be able to view multiple episodes

back to back (binge-watching), even without commercial interruptions. It was also

observed that the time shifting is not the top priority for the consumer when choosing a TV

platform.

The most important factor for the consumer is the cost of the TV service. It is not

surprising that the younger audience (18-34) is the group that is adjusting to IPTV faster

and cutting their cable/satellite cords. Cord-cutting practice unravels the bundles of

networks offered by cable and satellite providers and lets consumers focus on the

programming rather than the networks. This ultimately breaks the network loyalty since

the consumer focuses of individual programs. In this case the content library that is

accessible anytime and anywhere becomes very attractive to the audience. Many survey

takers have expressed that they use online applications to receive the niche content that is

not available through traditional television. An example to this is the app Crackle, which

has a wide catalog of Anime content.

Lastly, consumers have said that they don’t value the time-shifting quality of IPTV as much as they value cost or content catalog however a majority have also indicated they use mobile devices to consume their TV programming. This can be interpreted as

49 consumers underestimate the value of ability of time shifting to fit the TV watching activity in their daily time budget and schedule.

CHAPTER 6. LIMITATIONS

There are multiple limitations of this study. First one is the possible under representation of some demographics. The survey prepared did not focus on accessibility aspect of the TV consumption. Although ‘Close Captioning’ was included in the convenience factors, it is potentially rated low in importance due to the lack of representation of respondents who need close captioning.

There are no questions included in the survey to determine the daily schedules of the participants in detail. Although the daily leisure time information has been collected to analyze against time spent watching TV programming, it is possible that the participants could be watching TV content outside of their leisure time.

There was no specific age demographics determined for this study and the survey data was collected representing 7 major age groups. Due to the nature of the methods used for survey distribution, 41% of the sample group is composed of 25-34 year-olds. This has caused underrepresentation of following age groups: under 18, 55-64, and 65 or over.

Gender and ethnicity demographic data has also been collected but neither was

included in the analysis since they did not show any statistical effect on TV consumption.

Lastly, as this study points out the media environment is constantly changing with the advancement of technology. Therefore the results are valid for the time it’s being written, however it is fit to be repeated in the future to determine the changes.

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APPENDIX 1. SURVEY QUESTIONS

Q1 This survey is created to collect data for a Master's Thesis. Please select options that are most suitable to your TV consumption habits.

Q2 Do you watch TV on online platforms? (IPTV, TV Streaming)

 Yes (1)  No (2)

Q3 How old are you?

 Under 18 (1)  18-24 (2)  25-34 (3)  35-44 (4)  45-54 (5)  55-64 (6)  65 or over (7) ______

Q4 What is your gender?

 Male (1)  Female (2)  Other (3) ______

Q5 What is your estimated annual household income? (Ex. $60,000)

Q6 What is your race?

 White/Caucasian (1)  African American (2)  Hispanic (3)  Asian (4)  Native American (5)  Pacific Islander (6)  Other (7) ______

Q7 Do you watch programming that is not in English? (Please exclude the foreign content with English subtitles)  Yes (1)  No (2)

Q8 (Yes Is Selected in Q7) Please list the languages you watch your shows in. (Separate with a comma)

Q9 How many hours of leisure time do you have in a day?

 Less than 2 hours (1)  2-4 hours (2)  4-8 hours (3)  More than 8 hours (4)

Q10 How many hours of TV programming do you consume in a day?

 Less than 2 hours (1)  2-4 hours (2)  4-8 hours (3)  More than 8 hours (4)

Q11 Which of the following electronic devices do you own? (Please select all that apply)

 TV set (Traditional TV) (1)  Smart TV (2)  Laptop/PC (3)  Tablet (4)  Smart Phone (5)  Multimedia console (Xbox, PS4, etc...) (6)  Media Streaming Players (Apple TV, Amazon Fire Stick, Chromecast, Sling TV, Roku Box, etc...) (7)  Other (8) ______

Q12 What percentage of your shows do you watch using the following devices? (The sum must be equal to 100)

______TV set (Traditional TV) (1)

______Smart TV (2)

______Laptop/PC (3)

______Tablet (4)

______Smart Phone (5)

______Multimedia console (Xbox, PS4, etc...) (6)

______Media Streaming Players (Apple TV, Amazon Fire Stick, Chromecast, Sling TV,

Roku Box, etc...) (7)

______Other (8)

Q13 Please select the response that describes your TV consumption experience best.

______I receive my TV programs through cable and/or satellite TV subscription. (1)

______I watch most of my TV shows on their scheduled times. (2)

______I like to watch TV when my friends/family are present in the same room. (3)

______I'm aware that my friends/family are watching the same show at the same time when I'm not with them. (4)

______I receive my TV programs through an online TV provider. (OTT Network:

Netflix, Hulu and similar services) (5)

______I purchased subscription to access at least one online TV provider. (OTT

Network: Netflix, Hulu and similar services) (6)

______I use my friend/family's subscription to access at least one online TV provider.

(OTT Network: Netflix, Hulu and similar services) (7)

______I watch original programming by online TV providers. (OTT Network: Netflix,

Hulu and similar services) (8)

______I watch network programming after it airs on it's appointed time on online TV

providers. (NBC shows, ABC shows, Comedy Central Shows, etc...) (9)

______I often pause my TV program while I'm watching. (10)

______I often use rewind and/or fast forward features while I'm watching TV programs.

(11)

______I'm active on social media while I'm watching TV programs. (12)

______I live tweet during TV programs. (13)

______I often read and/or write blogs about TV programs. (14)

______Spoilers bother me. (15)

______I watched shows on scheduled time because I want to avoid spoilers. (16)

Q14 How important are following?

______None and/or shorter commercial breaks (1)

______Control options (pause/rewind/fast forward) (2)

______Close captioning (3)

______Low Cost of TV service (4)

______Ability of binge-watching (5)

______Schedule conflicts with other shows (6)

______Schedule conflicts with personal life (7)

______Schedule conflicts with other people you live with (8)

______Wider content catalog (9)

______Easy to navigate user interface (Guide/Search) (10)

______Customizability (Recommendations/Playlist/Wishlists) (11)

______Other (12)

Q15 Would you be willing to do an interview about your TV habits in the future?

 Yes (1)  No (2)

Q16 (If yes is selected Q15) What is your preferred way for an interview?

 Skype - Please enter your Skype display name (1) ______ Phone Call - Please enter your phone number (2) ______ E-mail - Please enter your e-mail address (3) ______

APPENDIX 2. SURVEY ANSWERS

Q2 - Do you watch TV on online platforms? (IPTV, TV Streaming) Answer % Count Yes 87.76% 989 No 12.24% 138 Total 100% 1127

Q3 – How old are you? Answer % Count Under 18 0.35% 4 18-24 21.38% 241 25-34 40.73% 459 35-44 20.32% 229 45-54 10.29% 116 55-64 5.41% 61 65 or over 1.51% 17 Total 100% 1127

Q4 - What is your gender? Answer % Count Male 45.79% 516 Female 54.13% 610 Other 0.09% 1 Total 100% 1127

Other Other Bigender

Q6 - What is your race? Answer % Count White/Caucasian 77.20% 870 African American 7.72% 87 Hispanic 5.77% 65 Asian 6.48% 73

Native American 0.35% 4 Pacific Islander 0.44% 5 Other 2.04% 23 Total 100% 1127

Other Other White and Native American Hebrew Israelite Asian/white White + Asian European American MULTIRACIAL Decline to answer Mixed Multi-cultural Biracial Multi - White, Hispanic, Asian, Native American South American/Non-Hispanic White / Hispanic Mixed Mixed Mixed White/Asian Mixed Race (White &Black) European Turkish Arabic

Q7 – Do you watch programming that is not in English? (Please exclude the foreign content with English subtitles) Answer % Count Yes 17.07% 192 No 82.93% 933 Total 100% 1125

Q9 - How many hours of leisure time do you have in a day? Answer % Count Less than 2 hours 13.78% 141 2-4 hours 48.58% 497

4-8 hours 30.50% 312 More than 8 hours 7.14% 73 Total 100% 1023

Q10 – How many hours of TV programming do you consume in a day? Answer % Count Less than 2 hours 44.18% 452 2-4 hours 42.82% 438 4-8 hours 10.95% 112 More than 8 hours 2.05% 21 Total 100% 1023

Q11 - Which of the following electronic devices do you own? (Please select all that apply) Answer % Count Laptop/PC 92.08% 942 Smart Phone 83.19% 851 TV set (Traditional TV) 76.64% 784 Tablet 61.97% 634 Multimedia console (Xbox, PS4, etc...) 48.19% 493 Media Streaming Players (Apple TV, Amazon Fire Stick, Chromecast, Sling TV, Roku Box, etc...) 43.40% 444 Smart TV 35.87% 367 Other 0.98% 10

Other Other Digital Converter Box netflix iPad blu-ray player, dvd player Tivo desk top computer netflix Kindle

Q12 - What percentage of your shows do you watch using the following devices? (The sum must be equal to 100) Field Mean St. Dev TV set (Traditional TV) 32.18 34.95 Smart TV 15.08 27.82 Laptop/PC 21.68 29.02 Tablet 4.91 11.58 Smart Phone 5.83 11.86 Multimedia console (Xbox, PS4, etc...) 7.05 17.83 Media Streaming Players (Apple TV, Amazon Fire Stick, Chromecast, Sling TV, Roku Box, etc...) 13.14 24.22 Other 0.82 8.09

Internet netflix Ipad blu-ray player, dvd player i dont watch tv DVD and BluRay Tivo Google tv netflix

Q13 – Please select the response that describes your TV consumption experience best. Field Mean St. Dev I watch network programming after it airs on it's appointed time on online TV providers. (NBC shows, ABC shows, Comedy Central Shows, etc...) 3.85 2.44 I watched shows on scheduled time because I want to avoid spoilers. 2 2.21 I often pause my TV program while I'm watching. 3.94 2.41 I receive my TV programs through cable and/or satellite TV subscription. 4.11 2.76 I often use rewind and/or fast forward features while I'm watching TV programs. 3.62 2.49 I like to watch TV when my friends/family are present in the same room. 3.61 2.03

I receive my TV programs through an online TV provider. (OTT Network: Netflix, Hulu and similar services) 4.71 2.34 Spoilers bother me. 4.02 2.49 I often read and/or write blogs about TV programs. 1.25 1.87 I live tweet during TV programs. 0.95 1.67 I'm active on social media while I'm watching TV programs. 2.63 2.4 I purchased subscription to access at least one online TV provider. (OTT Network: Netflix, Hulu and similar services) 4.72 2.63 I'm aware that my friends/family are watching the same show at the same time when I'm not with them. 2.57 2.15 I watch most of my TV shows on their scheduled times. 2.51 2.32 I watch original programming by online TV providers. (OTT Network: Netflix, Hulu and similar services) 4.51 2.45 I use my friend/family's subscription to access at least one online TV provider. (OTT Network: Netflix, Hulu and similar services) 2.7 2.8

Q14 - How important are following? Field Mean St. Dev. Variance Count Low Cost of TV service 5.48 1.77 3.14 1011 None and/or shorter commercial breaks 5.2 1.82 3.32 1016 Control options (pause/rewind/fast forward) 4.76 2.06 4.23 1008 Easy to navigate user interface (Guide/Search) 4.48 1.99 3.95 999 Ability of binge-watching 4.42 2.14 4.6 1000 Wider content catalog 3.99 2.28 5.21 995

Customizability (Recommendations/Playlist/Wishlists) 3.54 2.2 4.85 998 Schedule conflicts with personal life 3.39 2.32 5.4 996 Schedule conflicts with other shows 3.01 2.22 4.91 989 Close captioning 2.57 2.37 5.64 990 Schedule conflicts with other people you live with 2.36 2.16 4.68 970 Other 1.35 2.53 6.42 438

Q14_12_TEXT - Other Scalable quality options, such as resolution, compression. Not everyone has the same bandwidth allocation and data caps. This weighs on some decisions for online media consumption. time from release to availability

Ability to view entire seasons of shows anytime HD option Goo search tools I watch anime online Ratings DO NOT HAVE CABLE OR ANY PAY SERVICES LIKE NETFLIX easier searching WIDE RANGE OF SHOWS AND MOVIES Roku DVR different platforms Vikings, Sopranos Variety Reliability Consistency of content on Netflix Variety ability to stream on my phone easily over 4g local channels, news Ability to re-watch on demand it is requiring an answer here to move on Easy to use Programs I can't get elsewhere to record 3 or things at once Quality of program Frequency of new episodes

TV picture quality easy remote shows remain permanently on service synergistic programming User-friendly interface Commercials Remote Control Option Control over my schedule captions in other languages (NOT subtitles in English for foreign stuff. French/Spanish subtitles etc) Google tv The ability to choose custom services based on prices and desires Reliable service!

73 time Easier usage Searchability no content expiration full list of shows I don't want the program to use up too much of my monthly allowed about MBs. (ATT says Netflix uses a lot of MBs) Wide range of supported devices (Tablets, Xbox, Chromecast, etc.) Time to watch Unhappy with both major telecom providers