TV Everywhere Seen As Only Temporary Measure to Keep Viewers

Panelists rejected the idea that content has to be specifically designed for a secondary, mobile device. People access video on whichever medium is most convenient in a given moment, whether it’s a phone, computer or TV, said Karen Cahn, branded entertainment general manager at AOL. “It depends on what I'm doing and where I'm sitting,” she said.

"They watch it on what they watch it on,” said J.R. McCabe, video senior vice president, Time Inc., of consumers, and viewing is often concurrent. TV networks have to be “re-imagined,” beyond the traditional linear and cable business, McCabe said. Apps are being designed to exist in multiple worlds, he said, and TV content has to be developed in the same way for the multi-screen world.

On how that plays into the concept of the companion second-screen app, Palmer discounted the need for a subordinate application. “You have to imagine creating a new piece of content right from the start to touch all the screens,” he said. An app developed as a companion app is an “add-on, something you do after the fact,” he said. “That doesn’t work,” he said. When an app is imagined from the beginning for all types of screens, “you start to get it right,” he said. Cahn said AOL’s video platform was built the same way for mobile, the Web and for connected TVs, so AOL on TV functions exactly the same as AOL on a desktop, which helps with viewer loyalty and retention.

Panelists generally viewed TV Everywhere as a transitional measure for cable operators to remain relevant in the TV evolution to online streaming. TV Everywhere is going to help cable and satellite operators and telcos “keep subscriptions to some level,” said Steve Ronson, executive vice president-enterprises for A+E Networks. But the challenge for cable is to make the online experience as smooth as those from Amazon, Netflix and iTunes, which have created user experiences “that are quite good,” he said. Also, TV Everywhere will enable cable operators to expand beyond their geographical boundaries in coming years. “Imagine Comcast, which has a quarter of the country, taking TV Everywhere and selling subscriptions to IPTV-connected devices in territories that are not part of their cable footprint,” Ronson said. The implications create a picture of “the wild, wild West,” he said.

AOL’s Cahn saw TV Everywhere as a Band-Aid solution for cable companies. Ultimately, the winner of the contest for viewers’ eyeballs will be determined by the quality of the apps, she said. “Consumers care about the content they want to watch,” rather than the network or the Internet company that delivers it, she said.

Cable service doesn’t have an entrenched position in the minds of younger viewers, said Wikia’s Palmer. “Kids aren’t growing up thinking they need to be a subscriber to traditional TV and traditional methods,” he said. The model of adding more channels and increasing fees for cable subscriptions “is going to go away very quickly,” he said. That transition will happen more quickly if cable companies remain in a defensive mode rather than in an innovative mode, he said. “The battle is already being lost in the mindshare of the kids that are growing up today,” he said.

While the drop in broadcast viewership has been well documented, it’s not as steep as some might think, said Steve Bradbury, chief operating officer of Zazoom, citing figures from consulting firm Altman Vilandrie, which reported that from 2010 to 2013, TV viewership declined at the most 5 percentage points, and those modest declines were for the 18-24 and 45-54 age groups.

Despite a marked increase in viewing on nontraditional devices, fewer than five percent of consumers watch online video regularly instead of subscribing to cable TV, which was a negligible increase over 2012, according to Altman Vilandrie data. Non-subscribers canceled cable service primarily due to cost or the perceived value of cable service, not because online video was a complete substitute, the company said, and those who canceled subsequently spent less and subscribed to fewer services than average subscribers. The survey, done with Research Now with more than 2,500 U.S. consumers in July and August, revealed “surprising resilience” in the popularity of live TV viewing, it said. The popularity of live viewing and “watching shows when they become available is especially important to younger viewers,” according to findings.

At the same time, 80 percent of consumers under 35, and half of viewers above that range, watch TV shows and movies online each week, Altman Vilandrie said. Mobile device viewing “is exploding,” with more than a quarter of viewers under 45 watching TV content on a tablet each week, it said. The percentage of those surveyed who watch movies and TV programming weekly on a smartphone has nearly tripled in the past two years, the company said, from five percent to 14 percent. One in five 35-44 year-olds watches TV or movies on a smartphone every week, it said.

Results showed that while most viewers want to keep some relationship with cable, more are scaling back on monthly subscription costs, with “cord-shaving” having doubled since 2010. Twenty-six percent of viewers have cut back on cable services including video on demand, according to the survey. Top reasons for keeping cable service include live news (75 percent), new TV shows (66 percent) and live sports (59 percent), according to the survey.

Other findings included a bump in binge watching through Netflix or other on-demand streaming services. Just over half of consumers said they engage in marathon viewing sessions of a particular show. Mobile devices are also having an impact on the remote control. Half of those surveyed want a traditional TV remote, with the other half preferring to use a control app on a mobile device or laptop, according to the survey.