Magid Study Reveals Impact of Alternative Video Viewing Platforms on Traditional Television and Home Video Markets

Magid Study Reveals Impact of Alternative Video Viewing Platforms on Traditional Television and Home Video Markets

NEW YORK, Nov. 24, 2010 /PRNewswire/ --An annual study of consumer video consumption habits and platforms conducted by Frank N. Magid Associates reveals that despite the increased use of alternative video viewing platforms (like video-on-demand, set-top boxes, instant streaming, and mobile apps), the vast majority of consumers intend to continue to maintain their traditional subscriptions with cable, satellite, and telco TV providers.

For several years, cable, satellite, and telco TV providers have been working under the assumption that as the use of alternative video viewing platforms grows, consumers will increasingly "cut the cord" and cancel their subscriptions. On the contrary, Magid's new study, "2010: The New Age of Video Entertainment," uncovers several consumer behaviors that should persuade the industry to take a second look at earlier defection forecasts, including:

-- Consumers using the greatest number of alternative platforms also tend
to spend the most money on traditional subscription services. This
finding appears to undermine the view that the use of alternative video
viewing platforms will compel consumers to become "cord cutters," en
masse, by cancelling their television subscriptions. In fact, the study
shows that alternative video viewing platforms should be considered
additive to traditional subscription television.

-- Only 10 percent of consumers express an interest in trying TV show and
movie viewing from the Internet to a computer or tablet screen. In
contrast, interest surges in viewing this content on a TV screen via a
computer connected to the Internet, and it climbs even higher for
devices designed specifically to stream content to the TV (such as
AppleTV and Roku).

"The average American's capacity to consume video content is impressive," said Maryann Baldwin, Vice President of Magid Media Futures(TM). "As new video viewing platforms such as instant streaming and mobile apps proliferate, consumers are simply adding them to their portfolio of video viewing options. Our research indicates that this is definitely not a zero-sum game -- at least at this point, it appears that traditional subscription services and alternative viewing platforms can coexist with services like 'TV Everywhere' locking in revenues for traditional providers."

In addition, the study indicates that when the availability of Internet content has caused consumers to cancel their traditional service subscriptions, these circumstances remain the exception. Only a very small minority of consumers are even considering cancelling their subscriptions:

-- Only 1% of consumers report that they have cancelled their subscription
service in favor of accessing content available on the Internet, and
only 2.5% of consumers use Internet content exclusively.

-- In terms of future cancellations, only 3% of consumers report that they
are even considering cancelling their traditional subscriptions without
replacing it with a competing subscription, suggesting a relatively
stable subscriber base for traditional providers.

-- Purchase and rental of DVDs continue to be most at risk from the growth
in use of alternative video viewing platforms.

Magid's study also sheds light on the rate and magnitude of adoption for 3D television sets. Among them:

-- Eight percent of consumers are very likely to purchase a 3D television
set in the next 12 months. To provide context, in the early days of HD
adoption, Magid found that 8-10% of consumers said they were very likely
to purchase a HD television, while annual adoption reflected only 4-5%
growth. Should this pattern repeat, Magid predicts that roughly 5% of
households will have a 3D television by the fall of 2011.

-- Most important, however, is that there has been no change since late
2009 in the proportion of consumers who feel it is important that there
is more 3D content. This suggests that the growth in purchases of 3D
television sets will not be driven by consumers' interest in accessing
3D content; instead, the bundling of HD television sets with 3D
capabilities presents a more likely short-term growth scenario for 3D
adoption.

Taken collectively, Magid's "2010: The New Age of Video Entertainment" findings reveal that viewing habits and expectations have calcified somewhat since the demand-driving introduction of HD television sets a decade ago. As a result of this integration of HD television into American life, new areas like 3D, connected TVs, and video streaming should now play a more prominent role in programmer and consumer electronics strategies, with these alternatives considered "additive" to the consumer media experience as opposed to displacing traditional subscription-based video services.

About this study and new topics for 2010:

The online survey was conducted in October 2010 using a nationally representative sample of 1,208 adults age 12 years or older.

New topics of exploration this year include the first measurement of intent-to-purchase 3D television sets. Other new topics include use of nearly one dozen alternative TV show and movie viewing platforms both at home and out-of-home, interest in TV Everywhere-style services from cable and satellite, and more. Alternative platforms explored include streaming over computers, streaming video devices such as AppleTV and Roku, and mobile devices such as mobile video player and smartphones, among others. This is the ninth consecutive annual digital TV and HDTV report released by Frank N. Magid Associates, Inc.

The full report is available for $6,000 by contacting Julie Zipperer at 319-377-7345 or jzipperer@magid.com. Custom analysis, samples, reports, and in-person presentation/discussions are also available at an additional charge.

About Frank N. Magid Associates, Inc.

Frank N. Magid Associates is a leading research-based strategic consulting firm. Magid helps its clients become more profitable by solving problems and helping them take advantage of opportunities. Magid is unique because, for 53 years, the company has studied human behavior and how marketing and communication will cause consumers to behave in certain ways. Magid uses this unique "consumer lens" to help its clients develop and market products and services that successfully adapt to consumer attitudes, thereby changing behavior in ways that lead to improved financial performance. For more information, please visit Magid's website at www.magid.com.

SOURCE Frank N. Magid Associates

Frank N. Magid Associates

CONTACT: Maryann Baldwin, Vice President, Magid Media Futures(TM), +1-319-377-7345, mbaldwin@magid.com

Web Site: http://www.magid.com

-------
Profile: intent