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Going with the Flow: How to Captivate Video Streamers the Opinions and Behaviors of Adult Broadband Users

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Going with the Flow: How to Captivate Video Streamers the Opinions and Behaviors of Adult Broadband Users GOING WITH THE FLOW: HOW TO CAPTIVATE VIDEO STREAMERS THE OPINIONS AND BEHAVIORS OF ADULT BROADBAND USERS A WHITE PAPER GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 2 CONTENTS 2 Introduction 5 Value of Streaming vs. Pay TV 7 Devices and Viewing Time 10 Future Plans for Pay TV 11 Value Added “Features” and Bundles 13 CSG Conclusions 14 About This Survey 14 About CSG There are expanding choices for their viewing INTRODUCTION pleasure spanning free content, consumer-generated content, studio content and original programming HOW DO VIEWERS STREAM VIDEO? from new and highly creative (and motivated!) sources like Netflix and Amazon Prime. Some of the long- We believe that consumers are streaming video at an established leading providers of content have entered ever-increasing rate, and on more devices—across their the streaming video fray in recent months, including television sets, computers, smart phones and tablets. HBO, CBS, the NFL and the MLB to name only a few. © 2020 CSG SYSTEMS INTERNATIONAL, INC. AND/OR ITS AFFILIATES (“CSG”). ALL RIGHTS RESERVED. CSGI.COM GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 3 CSG thought it was important to explore the impact of all are cautioned that there are noted intentions to of this streaming viewership on the consumer’s opinion: downgrade or disconnect Pay TV subscriptions this year. Do they value streaming? There is a marked trend for subscribing to more than one streaming service, and as a result, subscribers Does streaming change the way they feel about greatly value subscription management “features” that traditional television offerings? facilitate their finding and paying for these services What are their expectations for managing the through a single service. expanding catalog of video content from a Service providers will delight customers through growing number of sources? increased partnerships and constructing a consolidated To measure behaviors and assess their opinions and subscriber portal for searching, content management and values, CSG worked with TDG Research to survey adult billing across each personalized bundle of video content. video streamers (herein ‘streamers’) from across the United States. This document explores key insights from this study. 80% 79% 20% SUBSCRIBE TO AT LEAST STREAM VIDEO ON THEIR OF ALL STREAMERS PLAN TO 1 PREMIUM VIDEO SERVICE TELEVISION SETS SWITCH, DOWNGRADE OR KEY FINDINGS CANCEL THEIR PAY TV SERVICES IN THE NEXT 6 MONTHS We have confirmed that viewers are streaming video, and GREATER THAN paying for it, at tremendous rates, on numerous devices. 48% 50% OF STREAMERS GREATLY VALUE OF MILLENNIALS SPEND The TV is the preferred device for streaming, and while FEATURE BUNDLES TO MANAGE THEIR TV TIME WATCHING ALL THEIR SUBSCRIPTIONS STREAMING VIDEO total hours of TV watching is consistent across all age groups, younger groups spent the majority of their TV time Streaming Video On Demand rather than watching live broadcast television. 18-34s SEE NET DECREASED VALUE The prevalence of streaming impacts the perceived IN THEIR PAY TV SERVICES value of traditional TV services, and service providers © 2020 CSG SYSTEMS INTERNATIONAL, INC. AND/OR ITS AFFILIATES (“CSG”). ALL RIGHTS RESERVED. CSGI.COM GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 4 SURVEY METHODOLOGY THE TOTAL POPULATION OF SURVEY RESPONDENTS (AVS) WAS COMPRISED OF THESE KEY DEMOGRAPHICS: In January 2016, CSG sponsored an online survey of 1,900 US adult broadband users that stream NORTH video—be it short-form, long-form, premium, or EAST 22% free—to one or more Internet-connected devices. MIDWEST WEST 22% 22% The survey was administered to a randomly chosen group drawn from a panel of more than two million US adults. Quotas were set to ensure that the SOUTH collection of respondents was representative of 36% US adult video streamers. All sample surveys and polls may be subject to multiple sources of error, including, but not limited to sampling error, coverage error, and measurement error. ANNUAL HOUSEHOLD INCOME SURVEY TERMINOLOGY $150,000 For a detailed glossary of terminology used in the 10% survey, please refer to this appendix. $100,000- UNDER $30,000 $149,999 11% 26% Key terms used throughout this document include: $75,000- $99,999 12% $30,000- $39,999 11% $50,000-$74,999 $40,000- $49,999 19% STREAMER DEVICE SVOD 11% An individual who Devices explored Streaming Video on views long- or include TVs, PCs, Demand is watching short-form video, laptops, smartphones non-broadcast content whether free or and tablets on an internet-connected paid-for device AGE GENDER 65+ 8% 18-24 55-64 19% ALL VIDEO PREMIUM VIDEO 16% FEMALE MALE STREAMERS (AVS) OTT SERVICES 25-34 51% 49% The total population of In the context of this SVOD services for which 18% the survey respondents survey, OTT means the streamer pays a fee, 45-54 in all charts Streaming Video on whether one-o or on a 20% Demand when viewed subscription basisce 34-44 on a TV 19% © 2020 CSG SYSTEMS INTERNATIONAL, INC. AND/OR ITS AFFILIATES (“CSG”). ALL RIGHTS RESERVED. CSGI.COM GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 5 VALUE OF STREAMING PREMIUM SPORTS SUBSCRIPTIONS Respondents indicated whether they knew of, VS. PAY TV once subscribed to or currently subscribe to these premium sports services: THE VALUE OF STREAMING Verizon go90 Respondents were asked if they currently subscribe NBA League Pass to these premium services: Netflix, Amazon Prime, Hulu, Sling TV, HBO Now, Sony Vue, CBS All Access, NHL Center Live any premium sports service, or other. MLB TV Not surprisingly, 80 percent of streamers subscribe NFL Network Gamepass to at least one premium service. Among these subscribers, half of them subscribe to more than UFC Stream one service. WWE Network A similar trend was discovered when exploring the Streamers were asked “Professional and collegiate adoption of streaming sports: 40 percent of sports sports leagues have also offered standalone apps— package users subscribe to more than one service. that is, you pay for specific leagues without having From these behaviors we conclude that the attributes to subscribe to a cable or satellite service. How of streaming—seeking out specific content in which familiar are you with each of the following standalone they are interested and viewing it on demand, streaming services?1” meaning on whatever device at whatever time they choose—are greatly valued. Once a user experiences HOW MANY PREMIUM SPORTS SERVICES this from one service they are likely to seek more of DO YOU CURRENTLY SUBSCRIBE TO? 25% the same. 20% HOW MANY SUBSCRIPTION VIDEO SERVICES DO YOU CURRENTLY HAVE? 15% 10% 82% 41% SUBSCRIBE TO AT SUBSCRIBE TO 5% LEAST ONE MORE THAN ONE PREMIUM SERVICE PREMIUM SERVICE 0% 1824 2534 3544 4554 5564 65+ SUBSCRIBE TO MORE THAN ONE SUBSCRIBE TO AT LEAST ONE PREMIUM SPORTS SERVICE PREMIUM SPORTS SERVICE © 2020 CSG SYSTEMS INTERNATIONAL, INC. AND/OR ITS AFFILIATES (“CSG”). ALL RIGHTS RESERVED. CSGI.COM GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 6 THE VALUE OF “TRADITIONAL” TV The not so good news is that because of SVOD, the younger age groups—Millennials and Generation X— Among streamers, we explored their views towards value traditional Pay TV services offered by cable or the fundamental attributes of “traditional” television: satellite providers less. Providers should take note Watching “live” shows when first broadcast that expectations are high among this set and the (defined as “live” for this survey and not the availability of alternate sources of content means Nielsen definition that includes a DVR window) they will become more difficult to retain as they value traditional services less. Having access to an extensive “bundle” of Pay TV channels that make up the traditional Impact of SVOD in “Traditional” TV cable or satellite package The net impact reflects the percentage of Commercials respondents who indicated the value of Watching live TV shows Having access to traditional home TV services 36 45 65+ had significantly increased (scores of 6 or 7) less the 24 18 44 percentage of respondents who indicated the value of these activities had significantly decreased (scores VALUE OF WATCHING TV SHOWS WHEN of 1 or 2). FIRST BROADCAST NET IMPACT The value of live TV shows for all is greatly enhanced by access to streaming video, while the 18-44s see a decline in the value of traditional Pay TV services. 7% 45 65+ -8 18 44 MILLENNIALS DISLIKE COMMERCIALS The survey asked respondents various questions VALUE OF WATCHING TV SHOWS WHEN FIRST BROADCAST NET IMPACT about their attitudes towards commercials. This chart illustrates the sentiments with which they most strongly agreed (top 2 scores on a 5-point scale). The good news is that SVOD has a net positive The younger age groups demonstrate significantly impact on watching live TV shows across all age stronger dislike of commercials than the older demographics. One can imagine that having access audiences. to a large catalog of content backlog—say, all of the Additionally, the 18-24 group represents fervent past episodes of “X-Files,” “Mad Men” or “Game of commercial avoidance (43 percent often or always Thrones”—enables viewers to catch up with the most avoid) at a much greater rate than the overall popular shows and become more engaged as new population (35 percent). episodes are broadcast. © 2020 CSG SYSTEMS INTERNATIONAL, INC. AND/OR ITS AFFILIATES (“CSG”). ALL RIGHTS RESERVED. CSGI.COM GOING WITH THE FLOW VIDEO STREAMERS — A CSG WHITE PAPER | 7 TO WHAT EXTENT DO THE FOLLOWING STATEMENTS REFLECT YOUR VIEW OF TV COMMERCIALS? 70% FERVENT COMMERCIAL AVOIDANCE 60% 50% 40% 30% 20% 10% 0% 1824 2534 3544 4554 5564 65+ COMMERCIALS ALLOW ME TO GET UP AND GO I PREFER NOT TO WATCH TV SHOWS AT ALL THAN TO THE FRIDGE, THE BATHROOM, ETC.
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