Press Releases

TDG: New HDTV Buyers 50% More Likely to Buy Net-Capable Sets Over 3D

The Diffusion Group — Wed, 11 Jan 2012 18:05:00 GMT

January 11, 2012 (FRISCO, TX) - According to new research from TDG, 56% of broadband households are to varying degrees likely to purchase a new TV in the next six months. TDG expects that close to 25% of broadband households will indeed buy a new HDTV in the next six months, which equates to at least 20 million new purchases during this time period—and that’s just among broadband households. This is good news for TV OEMs, no doubt. The question for many at CES is how many of these sets will be “smart” TVs—TVs that feature native Internet connectivity and can support a host of OEM or secondary “connected TV” applications—and how many will be 3D. Both instances represent higher-end purchases, thus greater revenue per set....(read more)

TDG: A Third of PayTV Subscribers to Use ‘TV Everywhere’ Services by 2016

The Diffusion Group — Mon, 09 Jan 2012 20:03:00 GMT

TDG: A Third of PayTV Subscribers to Use ‘TV Everywhere’ Services by 2016

January 10, 2012 (FRISCO, TEXAS) – To defend against the encroachment of over-the-top (OTT) broadband video services like Netflix and Hulu Plus, incumbent PayTV operators are launching so-called ‘TV Everywhere’ or ‘TVE’ services. These services allow residential PayTV subscribers to access many of the same channels they enjoy at home on their net-connected devices, wherever they may be.

According to TDG’s latest analysis, by 2016 more than 30 million households will use operator-provided TVE services to access their favorite video programs on their net-connected devices.

“The logic is straightforward,” notes Colin Dixon, TDG Senior Partner and author of the new report. “If consumers can access their PayTV services on their PCs, pads, and mobile phones, they should be less likely to use competitive services like Netflix or Hulu and thus less likely to ‘cut the cord.’”

Will this strategy work? Perhaps, argues Dixon. “Though having 30 million households actively using TVE services by 2016 is not insignificant, by that same time OTT video services will be used by nearly 90 million U.S. households. That’s the reality that PayTV operators are facing.”

In regards to TVE market dynamics, a few major content providers will choose to go it alone and sell direct-to-consumer (that is, without operator sanction), while some operators will attempt to extend existing carriage agreements to cover net-connected devices (that is, without content provider sanction). In most cases, the middle road will be most fertile, meaning content providers may be able to frame the end-user experience but operators will provide a branded, authenticated “gateway” through which consumers access the content. In other words, if a consumer does not subscribe to the content through a PayTV operator, TVE access will not permitted.

For these reasons, Dixon expects that Operator or “Op-TVE” services will dominate this market space. Though Content Provider or “Con-TVE” services will play a role in the early market, they will quickly be absorbed by Op-TVE services.

According to Dixon, this multi-screen, multi-source paradigm will gain traction over the next few years, due primarily to a shift in viewing models, from a “...content-centric model - where the viewer seeks to find the content - to a viewer-centric model - where the content seeks to find the viewer.” In this quantum video universe, multiple sources appear on the TV screen and on-demand availability matters more than the source of content.

TDG’s latest report, TV Everywhere Update, 2012, is now available for purchase. The report offers a detailed analysis of the various vendors and operators active in the U.S. ‘TV Everywhere’ space, as well as a discussion of key market drivers and inhibitors, and annual forecasts of household use through 2016. For more information about this new report, please contact our Research Services Team at 469-287-8050.

TDG Introduces 'First Glance' Segmentation of TV Viewing Preferences

The Diffusion Group — Tue, 06 Dec 2011 17:16:00 GMT

TDG Introduces ‘First Glance’ Segmentation of TV Viewing Preferences

Analysis Identifies Five Distinct Viewing Preference Segments, Two Evolving Away from Traditional TV Sources

December 6, 2011 (Frisco, TX.) - While consumers have long ranked live TV programming as their top television content source, the arrival of new platforms and services including digital video recorders (DVRs), PayTV on-demand services, and online video has complicated the selection process. According to TDG’s new report, Viewing Preferences in the Age of Multi-Source Television, a growing number of TV viewers fall into segments inclined to first tune into a source other than live broadcast TV.

To better understand this shifting behavior, TDG developed a quantitative framework based on consumer ‘First Glance’ TV preferences among different television content sources, including live broadcast, DVR-recorded, on-demand, and online shows, as well as physical discs such as DVD or Blu-ray. Based on this analysis, TDG identified five key segments; non-overlapping groups that exhibit unique TV source preferences. The graphic below identifies the relative size of each segment among the adult broadband population.

The dominant characteristics of each segment are summarized below:

Black-Box Baulkers - strongly prefer live broadcast and on-demand content, but shy away from adding new ‘black boxes’ to the TV system, especially devices they have to connect and configure. If a service is fully integrated into their one-device, on-remote experience (e.g., PayTV on-demand) they will bite. If not, forget about it.

TV Traditionalists - prefer live broadcast programs and physical discs, but are much less likely than average viewers to subscribe to or use PayTV on-demand or other value-added services, much less to view DVR-recorded or online TV content. They want ‘regular’ TV and little more.

DVR Devotees - all members of this segment own a DVR and exhibit a uniquely strong initial preference for DVR-recorded content. Despite this penchant for recorded material, however, this segment has very little interest in on-demand content, regardless of source. Interestingly, they are more likely than other segments to subscribe to satellite PayTV versus cable.

Broadcast Castoffs - prefer DVR-recorded and Internet video for ‘First Glance’ TV viewing and have very little interest in live broadcast content. In fact, only 72% of this segment has access to live TV broadcasts on their TV. Similarly, they have absolutely no interest in PayTV on-demand services, be it free or transactional.

New Video Enthusiasts - the ‘Early Adopters’ group in this segmentation, they prefer Internet video, PayTV on-demand, and DVR-recorded material, and are less likely to turn to live TV or physical discs (more traditional TV content sources).

TDG’s new report, Viewing Preferences in the Age of Multi-Source Television, uses advanced statistical methods to develop a unique and useful understanding of the TV viewing preferences of different consumer segments. The report offers a detailed discussion of segment characteristics, including demographics, technology affinity, advanced platform diffusion and use, and media consumption. For more information about this new report, please contact our Research Services Team at 469-287-8050.

TDG Releases New Report Examining Web Browsing from Top Consumer Electronics Devices: No Keyboard, No Mouse, No Problem?

The Diffusion Group — Mon, 19 Sep 2011 18:51:00 GMT

TDG Releases New Report Examining Web Browsing from Top Consumer Electronics Devices:
No Keyboard, No Mouse, No Problem?
Survey-Driven Study Reveals the Good, the Bad, and the TBD of Web Browsing Via the TV

September 8, 2011 (Frisco, TX) – A new report from TDG reveals that a surprising number of adult broadband users (ABUs) are viewing the web from non-traditional browsing devices – products not explicitly designed for that purpose.

“Many millions of non-traditional Internet viewing devices have built-in or available web browsers, providing users access through popular consumer electronics products already commonplace in the average home,” explains Colin Dixon, TDG Senior Partner, Advisory, and report author. “The experience, however, is far less than that available on a PC or iPad and non-traditional browsing devices face serious challenges.”

For the report, TDG surveyed 1,500 ABUs to assess their uses and opinion of browsing from the television and found that more than one-third are already doing so. According to the new research, 10% of respondents used a Smart TV browser in the last year, with a quarter of those using it at least once a day. However, far more ABUs use Nintendo Wii (30%), Sony PS3 (26%), and the venerable PC connected to the TV (PC2TV) at 20%.

Although there is a group of early adopters quite enthusiastic about having a browser on these non-traditional browsing devices, they must contend with a host of limitations. They include the lack of a keyboard and mouse, limited processing power, and screens with different sizes and resolutions.

As detailed in the report, TDG believes that consumers will use companion devices that are far better suited for web browsing, such as iPads and smartphones, separately and in combination with television. It is unlikely consumers will embrace web browsing from non-traditional Internet viewing en masse.

TDG’s new report, Web Browsing from Top Consumer Electronics Devices: No Keyboard, No Mouse, No Problem?, mines recent primary research and survey results focused on the web browsing behavior of adult broadband users employing consumer electronic devices without a keyboard and a mouse. The report sizes the early market for CE device browsers, and profiles individual market segments. For more information about this new report, please contact our Research Services Team at 469-287-8050.

Netflix Subscribers Crying Foul May Be Crying Wolf

The Diffusion Group — Sun, 24 Jul 2011 20:17:00 GMT

Netflix Subscribers Crying Foul May Be Crying Wolf

Flight from Netflix More Myth than Method, Disenchanted Subscribers Likely to Tweak Service, Not Cancel

Frisco, TX (June 25, 2011) – According to new research from TDG, 70% of Netflix dual-service subscribers — those that use both DVD-by-mail and streaming video — are disappointed with Netflix’s new pricing scheme. However, most are unlikely to cancel their subscription but reduce their subscription to a single service — that is, choose either DVD-by-mail or video streaming but not both.

TDG’s research found that 34% of dual-service subscribers are to varying degrees likely to cancel their streaming service but keep DVD-by-mail. It seems having subscription access to a large library of discs is more important than on-demand access to a growing but more limited streaming collection.

Conversely, 44% of dual-service subs are to varying degrees likely to cancel DVD-by-mail but keep their streaming service. Access to a limited but growing streaming library on all their connected devices is more important than having access to a larger, more current library of physical discs.

In other words, while DVDs are important, a dominant and growing percentage of Netflix subscribers consider streaming video more important.

“This is a significant finding,” notes Michael Greeson, TDG Founding Partner. “It suggests that, at least among dual-service subscribers, preferences have tipped to favor video streaming over physical discs. This was a central assumption behind Netflix’s risky decision to change prices at this time in the game.”

The risk that Netflix faces is self-evident, notes Greeson: a solid 37% of dual-service subscribers are to varying degrees likely to cancel service because of the new pricing. For the most part, however, this is a natural reaction to being asked to pay more for a valuable service for which they previously paid less. “Once they see what alternatives exist in the marketplace, Netflix won’t look so bad.”

Nonetheless, TDG predicts that between 12% and 15% of dual-service Netflix subscribers will in fact cancel their service in the next six months specifically because of the new pricing scheme — a loss of between 2.0 and 2.5 million subscribers. Significant, of course, but a cost Netflix considers justified and reasonable in order to (a) realign its cost and revenue structure, and (b) wean its subscribers away from DVDs and toward streaming video (a strategic imperative).

TDG’s new report, Gauging Consumer Reaction to Netflix’s New Pricing Strategy, highlights the results of the firm’s latest study, including viewing likely reactions through the lens of demographics (age, income, presence of children in the home), Netflix use (DVDs viewed monthly, weekly streaming habits), and a variety of other factors. As well, the report discusses the content sources to which Netflix cancellers will most likely turn.

For more information about TDG’s new report, contact Andy Tarczon at 469-287-8060 or visit our website at www.tdgresearch.com.

TDG: Proclivity to Downgrade PayTV Services Increasing among Netflix Streamers

The Diffusion Group — Thu, 09 Jun 2011 08:21:00 GMT

NOTE: We've noticed this research being misquoted in some publications. If you are looking to better understand this release, please review: “Netflix to Kill PayTV Revenues” – Really?

TDG: Proclivity to Downgrade PayTV Services Increasing among Netflix Streamers

New Report from The Diffusion Group Profiles Netflix Streamers, Offers Unique Insights into Frequency-based Usage Segments

Frisco, TX (June 13, 2011) – According to The Diffusion Group’s (TDG’s) latest analysis of Netflix Streamers—those that stream Netflix content to their net-connected devices—the inclination to downgrade PayTV services has doubled in just the last 12 months.

In March 2011, TDG queried a random sample of adult broadband users that subscribe to cable, satellite, or telcoTV service as to the likelihood they would downgrade their PayTV service in the next six months—that is, “…move from a higher service tier to a lower one, or cancel a premium service of some kind.” In general, the percentage of Netflix Streamers to varying degrees likely to downgrade their PayTV service increased from 16% in 2010 to 32% in 2011.

Though Netflix has gone to great lengths to reassure PayTV operators that its offerings are additive to regular TV viewing and thus not a competitive threat, research now suggests that the ‘Netflix Effect’—that is, growing use of Netflix will lead to PayTV service downgrades and even cancellation—is gaining momentum.

“Despite its rhetorical positioning, both Netflix and PayTV operators have long been aware that there will come a point at which its services are not only dilutive to regular TV viewing, but antithetical to PayTV subscription levels,” notes Michael Greeson, TDG founding partner and director of research. “The question for realistic observers has been not if this will occur but when. According to our latest research, that time is upon us.”

While research continues to suggest that such tendencies are due primarily to economic belt tightening, TDG discovered that the primary rationale varies by frequency of Netflix streaming. For example, close to half of all Netflix Streamers likely to downgrade their PayTV service in the next six months cite “cost of service” and “the need to save money” as the primary reason for this disposition. Conversely, 34% cite their growing use of online video as the culprit, two-thirds of which cite Netflix in particular as the primary perpetrator.

Among moderate and heavy Netflix Streamers likely to downgrade, however, 61% cite growing use of online video as the primary reason for likely downgrade (two-thirds of which cite Netflix use in particular). Only 24% of moderate and heavy Netflix Streamers cite economic concerns as their primary motivation for downgrade.

TDG’s latest report, Profiling Netflix Streamers, 2011, is a follow up to TDG’s 2010 profile, mining data from a March 2011 survey of 2,000 U.S. adult broadband users on a variety of subjects related to quantum video consumption. The new report offers a year-over-year trending analysis, segments 2011 Streamers by frequency of services usage, and profiles these segments by key metrics including CE ownership, video viewing, and demographics.

For more information about TDG’s new report, contact Andy Tarczon at 469-287-8060 or visit our website at www.tdgresearch.com.

Internet Features are the Norm for New TV Devices

The Diffusion Group — Thu, 02 Jun 2011 03:04:00 GMT

Internet Features are the Norm for New TV Devices

New TDG Research Forecasts Explosive Growth in Net-to-TV Connectivity

Frisco, TX (June 2, 2011) – According to The Diffusion Group (TDG), the number of households that will be using over-the-top (OTT) video services will grow from 106 million in 2010 to 250 million in 2016. While impressive, this is but 51% of the households that will be capable of receiving OTT TV services in 2016. In other words, 488 million households will have the hardware and broadband services in place to receive OTT video services, but only a portion will actively take advantage of these connections.

It is this gap between OTT-capable and OTT-active households on which TDG has concentrated its energy. Unfortunately, industry conversation has been derailed by a premature focus on so-called "cord cutting," when in reality the opportunity/threat lies in chipping away at PayTV’s “premium” offerings like HBO. According to TDG Senior Partner Colin Dixon, this is precisely where net-connected TV platforms are having the most impact, pushing over-the-top video services like Netflix into mainstream living rooms.

“In 2009, net-based TV video services were few and far between. Today, when a consumer connects a 'smart' TV, a Blu-ray player, or any other video platform to the Internet, they will find a wealth of TV-optimized content and applications at their disposal.”

Among the various OTT platforms Dixon analyzes in TDG’s new report, he predicts that game consoles will continue their dominance at least for the next several years. Net-ready “smart” TVs will move swiftly into the market place, as will net-connected Blu-ray players, Internet set-top boxes, and hybrid boxes that blend PayTV functionality with Internet video services and applications, in many cases bringing IP functionality to live TV.

TDG’s latest report, OTT TV Platforms, 2011 - Forecasts & Analysis, identifies six drivers that will spur OTT TV platform diffusion:

Traditional consumer electronics replacement cycles will lead to replacement of legacy devices with net-ready models.

Wider access to digital content across a variety of connected devices as operators relax their content distribution restrictions.

Policies affecting the distribution of Internet video content will be decided by national governments and will impact the adoption of devices that enable OTT delivery.

Consumers are growing accustomed to on-demand media delivery, and products and services that support on-demand access will be favored.

All forms of personal media are now digitized, and consumers increasingly want to access this digital media on their televisions—be it video, music, or photographs.

OTT services are now being offered on multiple screens, allowing a consumer to enjoy media not only on their PCs, but mobile devices and televisions as well.

TDG’s new report, OTT TV Platforms, 2011 - Forecasts & Analysis, offers new insight on the future of OTT-capable TV devices, as well as their use in OTT-capable households. To purchase TDG’s new report, or to obtain more information about the analysis, please visit TDG’s website at www.tdgresearch.com or contact Andy Tarczon at 469-287-8060.