Wednesday, January 29, 2014, 10:08 PM ET|Posted by Jose Alvear
A new report from research firm GfK has found that 56% of U.S. pay-TV subscribers now use VOD or a TV Everywhere offering from their provider, with 41% saying they use OTT subscription streaming services like Netflix, Hulu Plus, and Amazon Prime. However, of those that use both, 44% rated streaming services “better” than VOD, while 27% said they preferred VOD, and 29% said the two are equal. The good news for VOD is that this preference flips for those that use VOD more than once a week, with 43% preferring VOD, 30% OTT streaming and 27% equal.
In addition, for these regular VOD users, 57% said VOD has "excellent" or "very good" content variety compared to 55% for streaming. But those who use VOD less than once a week thought that streaming services were highly superior in content choice - 67% vs. 28%.
Citing a lack of consumer education and effective marketing, David Tice, SVP of GfK Media and Entertainment, said pay-TV operators are still leaving a lot of opportunity on the table with their VOD services vs. OTT streaming. He said operators need to get repeat users to start winning the perception battle and that consumers are open to considering alternatives to Netflix.
The survey also measured pay-TV subscribers' use of TV Everywhere and the impact of these services. Somewhat surprisingly, 41% of respondents said they've used TV Everywhere, even though only 23% were familiar with the actual term. GfK found that authentication is still a key challenge, with 90% of respondents saying they don't know their login information and 2/3 saying they wouldn't even know how to find it. To address this, GfK recommends standardizing the authentication process (including switching to a better name) and more widely implementing auto-authentication.
Regardless, TVE users are 28% are more satisfied with their pay-TV service (up from 24% last year), and 33% are less likely to change pay-TV providers (up from 25% last year). For TVE users that also subscribe to OTT streaming the numbers are slightly better; 35% are more satisfied and 39% are less likely to change providers. So it seems like subscribers are seeing some of the benefits of TV Everywhere, which are in turn accruing to pay-TV providers.
GfK’s report "How People Use Media: TV Everywhere/VOD” is based on a survey of 1,007 people age 13-64 in U.S. pay-TV homes.
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