TV Everywhere: How To Assess Success?

With widespread availability of TV Everywhere in North America as of this summer according to a Parks Associates study and with a consumer awareness campaign recently launched by Turner Broadcasting it is interesting to think about what success would look like…in terms of what distributors and their network partners are trying to achieve.

It seems to me there are three goals:  (1) stimulate cross-platform uptake and usage of programming and thereby extend the reach of the advertising, (2) reduce the likelihood of cord cutting behavior and (3) reduce cannibalization of cable or satellite time by on demand alternatives.  Though there’s some payout associated with the first goal the second two defensive goals are the key to why TV Everywhere platforms are being implemented…to subsume evolving consumer behavior into the existing business model and prevent the dynamics that disrupted the music business from affecting TV.

At this point I haven’t seen uptake or usage numbers surface in the public domain.   The NYT piece about the Turner campaign launch cites nothing more definitive than “millions”of users of HBO GO…since its launch earlier in 2011.   I’ve seen no numbers for Fancast Xfinity TV though its been available to Comcast subscribers since December 2009.

But, per my argument above, if we want to asess the success of this strategy, uptake is only part of the story.   We’d want to show that availability and usage of TV Everywhere makes customers less likely to cut the cord…because they can get a wide variety of on demand TV shows and movies along with their cable subscription they are less likely to cancel that subscription in favor of on demand options.   And we’d want to show that those who use TV Everywhere are less likely to dip into Netflix streaming or other on demand options…that one behavior effectively supplants the other.

It is possible, for example, that people likely to adopt TV Everywhere are a different set of people than those likely to cut the cord.   The former may be happy to expand cross platform options from their cable or satellite provider for no extra cost while the latter, under stronger financial pressures, feel a need to reduce their spending.   One group coming in the top may not forestall others falling out the bottom.

Of course there is serious question about how many people really are falling out the bottom.   As cited in a previous post,  a J.D. Power and Associates study released in June showed just 3% of cable or satellite customers had cut the cord, 6% among Generation Y…

Still, if one of the goals of TV Everywhere is to keep this behavior from expanding to more customers and to the industry’s core demographics, we need to explicitly monitor if A really does prevent B.    And if it does not, if cord cutting continues despite operators providing and touting TV Everywhere, we have to consider (as per recent comments by Bernstein Research’s Craig Moffett) that perhaps prices are simply too high; offering cross platform access for the same price just can’t match the allure of a la carte on demand services replacing the cable bill:

“Perhaps the most consistent theme in our research over the past two years has been the widening disconnect between flat-to-declining consumer disposable income, particularly in the bottom two quintiles of household income, and the rising price of media and telecommunications services”

The other defensive role that should be monitored is whether TV Everywhere customers are actually less likely to tap into on demand video services like Netflix or Hulu.   This is another case of whether A really does prevent B.   One question to keep an eye on is whether consumers tend to use TV Everywhere for a limited, specific purpose…catching show episodes that they’ve missed… while continuing to use competing on demand services for another function, mining a broad movie database for something, old or new, that fits their mood and preferences.   Just as Netflix, entering the streaming world, is struggling with their lack of new and original program content, cable and satellite operators expanding their presence in the on demand world may need to tweak the depth, organization and positioning of their offerings to keep on demand competitors at bay…for all the needs that people want from these services.

Implementing a defensive plan is an important first step for the industry.   The next step is making sure that it is, in fact, serving all the intended defensive functions.


Media Multi-Tasking And The Battle For Attention

The average amount of time that people give to some media platforms is trending up (mobile and Internet) and others are trending down (magazines and newspapers).  But the average amount of time they give to all media combined is rising inexorably.

This is shown in an eMarketer item with the figures below: an average of 660 minutes or 11 hours a day across all media in 2010, up 1.5% from 2009 and up 3.9% from 2008.   This analysis does not include pre-recorded music which would surely drive the numbers higher.   You have to wonder where it will end; is there no limit to the amount of media that people will consume?

Media multitasking is one of the things that keeps the total number rising; people using two or more media simultaneously.   eMarketer is explicit; the time that they report is for each medium separately; an hour spent watching TV while online is counted in both the TV and the online numbers.  The rise of the total suggests that as more media find their place in people’s lives they are increasingly layered on top of one another.  So the question becomes not what medium are people using at any given time but which of the various media they’re using is capturing most of their attention; what medium is in the foreground while others are playing in the background.

A study conducted for Yahoo! by Nielsen, reported in mid-2010, suggests that when TV and online are used together online is likely to be in the foreground and TV in the background.    The way I read this press release, 75% of respondents ever use TV and Internet together and 51% of the 75% do so daily.   So 38%, a bit more than a third, show daily simultaneous use of TV and Internet.   What’s really telling, beside the frequency of the behavior, is that the online activity is generally unrelated to the TV programming or commercials being viewed – and 54% report that the Internet is the primary focus of their attention.   54% is not overwhelming; plenty of people are reporting background Internet usage.    But the picture you get, at least for some of the people some of the time: unrelated Internet activities like Google or Facebook are in the foreground of their attention while the TV plays in the background. The frequency of this pattern will of course be higher for younger people.

An implication of this for programmers and TV advertisers:  you need to be (or be advertising on) foreground TV, not background TV.   TV that’s winning the cross-media battle for attention.

In this regard I’ll suggest a hypothesis.  The medium that wins the battle of attention, for any given consumer at any given time, is the one where the consumer is making the most deliberate content choices.    Online tends to win against TV, though not overwhelmingly, because simultaneous users are more active online, choosing what they want to see and do while the TV plays on.

And so…if people choose to watch their TV fare on-demand, from over-the-top sources like Netflix or Hulu, that deliberately selected content will be more likely than more their more casual TV choices to capture attention versus other simultaneous media the user is engaged in.   To the degree that there is advertising on on-demand and over-the-top TV content, that real estate will be increasingly valuable in a media-multitasking world.