• Report: Pay-TV Tablet App Usage Improves, But Still Nominal

    TV Everywhere is the pay-TV industry's most important strategic priority to combat OTT viewing and enhance the value of expensive monthly subscriptions. In my view, a pretty good proxy for how TV Everywhere adoption is going is subscriber usage of pay-TV operators' tablet apps. According to a new report from Digitalsmiths, there is both good news and bad news on this: usage is increasing, but it remains at a nominal level.

    The Digitalsmiths Q2 2013 Video Discovery Trends Report, based on 1,850 adult respondents, shows that of the 29.5% of respondents who say they own a tablet, just 23.8% have downloaded their pay-TV operator's app. Over half (52.4%) don't even know whether their pay-TV operator offers an app. In a bit of good news though, 42.9% of those who have downloaded their pay-TV operator's app say they use the app at least once per week. Indexing to 100 respondents, this would mean approximately 3 respondents, or 3%, use their pay-TV operator's app at least once per week.

    That's not a very big number, but it is actually almost double what it was in Digitalsmiths' Q1 report. With reported tablet ownership and percentage who have downloaded a pay-TV app declining just a bit from Q1 to Q2, the big driver of the increase is the percentage of people who have downloaded the app actually using it. The Q2 42.9% once per week or more usage level compares with just an 18.2% once per week or more level back in Q1.

    Translation: the industry still has a lot of work to do to make subscribers aware of their apps and motivate them to download, but once subscribers HAVE downloaded, they seem to be recognizing the apps' value and are using them more often.  

    Improving tablet viewership (and indeed TV Everywhere usage in general) is so critical to the pay-TV industry, because, as the report also shows, OTT usage is continuing to grow, with 35% of respondents saying they now subscribe to at least one subscription OTT service. No big surprise, the top 2 motivators for why people subscribe to OTT services are convenience and price. Meanwhile, nearly 74% of pay-TV subscribers said they don't purchase movies from their service's VOD catalog.

    All of this is leading to "cord-cheating," a term Digitalsmiths has dubbed to describe the idea that consumers are shifting their on-demand behavior to OTT services, rather than their pay-TV operator's own VOD offerings. Digitalsmiths sees pay-TV becoming more of a linear-style service offering, and a narrow one at that, with 86% of subscribers saying they typically watch the same 10 or fewer channels.

    The report underscores the fact that although TV Everywhere as a concept has been around now for 5 years, its actual implementation and usage of it remain nascent, even as OTT services such as Netflix, Hulu Plus and Amazon have surged. The pay-TV industry has a lot of hard work to do in order to win back its subscribers' on-demand and tablet-based viewing behavior.

    The report can be downloaded here.