TV Consumer Insights 2010

TV Consumer Insights 2010 “IT’S ALL ABOUT EXPERIENCING”

ConsumerLab Project team: Anders Erlandsson, Anders Kälvemark, Niklas Rönnblom

TV Consumer Insights, Ericsson ConsumerLab | Commercial in confidence | © Ericsson AB 2010 | 2010-08-25 | Page 2 (17)

Ericsson ConsumerLab

› The voice of the consumer into Ericsson since 1995–

Research representing opinions of more than 1.1 billion people

–

Use consumer insight to improve›

Products and services

›

Strategy›

Marketing

›

Our customers’ products and services

Operators and service providers Consumers


Sample representative for more than 300 m consumers

China Germany Spain Sweden

Taiwan UK US

Population aged 15-59:

Representativity of sample (15-59) in %:

Representativity of sample (15-59) in size:

51 M16 M 183 M

Population aged 15-59:

Representativity of sample (15-59) in %:

Representativity of sample (15-59) in size:

48 M550 M 26 M 5 M

11% 80%* 90%

86%70%* 86%

44 M11 M 157 M

39 M60 M 20 M 4,6 M

82%

Total**

880 M

38%

336 M

* Estimations using knowledge from similar markets ** Including estimations for Spain and Taiwan (31 M)Source: Ericsson ConsumerLab MSMC-study 2010


We ARE IN A transition period

› Consuming TV/Video is very popular and people are today spending up to 35% of their leisure time on watching content

Consumers are currently…› Exploring new TV/Video technologies› Enriching the viewing experience › Creating new consumption patterns

…meaning:› TV/Video consumption is fragmented and complex› Few established consumption patterns› A trial and error market with lots of curiosity around

Source: Ericsson ConsumerLab MSMC-study 2010


On demand is here to stay…

› More than 70 % are “time- shifting” on a weekly basis (streaming, downloading or watching recorded broadcast TV)

› More than 50% are using internet based on demand TV/video every week

› Google search results…–

“Online TV shows free”: 677 million hits

–

“Web TV free”: 495 million hits

19

36

41

45

48

57

62

93

0 20 40 60 80 100

Watch PPV

Watch streamed OD movies

Watch DL content

Watch streamed OD TVprogrammes

Watch DVD/VHS/Blu-ray

Watch short video clips

Watch rec broadcast TV

Watch scheduled broadcast TV

Weekly use of different TV/video distribution channels (%)

Consumption of on demand content is growing rapidly - and there is no return…

Source: Ericsson ConsumerLab MSMC-study 2010Base: ALL


Distribution channel And their effect on broadcast TV

FOCUSED

PLANNED

UNFOCUSED

UNPLANNED

Owned Rented

DVD/Blu-ray/VHS

› Reliable› Easy to use› Legal

› Costly› Must leave home› Burning procedure

FOCUSED

PLANNED

UNFOCUSED

UNPLANNED

Web-TV

Streaming (Web-TV, series)

› Instant access› Simple & free› Legal

› Time limits› Pixilated quality› Unreliable access

FOCUSED

PLANNED

UNFOCUSED

UNPLANNED

Downloading

Downloading

› Unlimited supply› New/fresh content› Free content

› Cumbersome› Corrupt files/virus› Legal concerns

FOCUSED

PLANNED

UNFOCUSED

UNPLANNED

VOD

Video on demand

› Reliable› On demand› High quality

› Unfairly priced› Limited supply› Easy to forget


Future of broadcast TVFOCUSED

PLANNED

UNFOCUSED

UNPLANNED

Traditional broadcast TVFOCUSED

PLANNED

UNFOCUSED

UNPLANNED Broadcast TV

Live

Non live content

› High quality› Easy and simple› Relaxed setting

› Have to adjust tothe TV-schedule

› Not personalized

› High quality› Easy and simple› Relaxed setting

› Have to adjust tothe TV-schedule

› Not personalized


on demand’s attractiveness spurs consumption

Limited, scheduled, commercials

Unlimited, time-shifted personal

Non-Live Broadcast On demand

Traditional viewing experience

Enhanced viewing experience

Trying to cut back Increased usage

From “What’s on” to “What do I feel like watching…”Source: Ericsson ConsumerLab MSMC-study 2010


No single device has it all

Values› Simple & convenient› High quality› The social screen› ”Backwards leaning”

Usage› Relaxing› Sharing the experience› Fighting loneliness

Values› Time shifting› Free & unlimited content› The private screen› ”Forward leaning”

Usage› Active consumption› Multi purpose screen› Multitasking› Private consumption› In home portable (laptop)› During travel (laptop)

Values› To kill time

–

One of many options› Only option available

–

When away from ”home”

Usage› In-transit screen› While waiting › Entertaining the kids when

away from home

TV The Social Screen

12,2h/week

Computer The Private Screen

8,6h/week

Mobile devices The Mobile Screen

2,8h/week

Each screen has its usage and purpose, as a part of the TV-puzzle

Base: AllSource: Ericsson ConsumerLab MSMC-study 2010


Drivers for connecting

PC and TV

Base: Have connected a computer to a TV screen

2

8

14

15

16

16

17

47

52

67

70

Other reasons:

Same screen for PC andTV (only have one)

Others wanted toconnect them

To browse Internet onmy TV

I was curious

I read about it anddecided to try

I was inspired by firendswho had

To show pictures on theTV screen

To watch "PC" contenttogether with others.

To watch "PC" contentmore comfortable

To get a larger screen

Experience and social aspects are heavy triggers for merging the TV and PCSource: Ericsson ConsumerLab MSMC-study 2010


barriers for connecting

PC and TV

- Awareness of alternatives

Aware of alternative way to watch TV

- Access to ”Time- shift” features

- Knowledge

- Interest

On demand/time shift usage

- Know-how

- Awareness of possibility

- Fear of the task

Decision to connect the TV and PC

- To old TV

- No cable

- Astethical reasons

- To far away

- Cost

Access to required technology

Barriers (Examples)

- Complicated navigation

- Separating private and social usage

- Time, if not permanently connected

- Online content becomes pixelated on large screens

TV and PC connected

Step

Step

Step

Step

Step


› Connecting the PC and the TV is still way to complicated for the majority of people.

› Even when one have managed it, there are still some issues and problems left


The future of “TV” is centered around experiencing


Leaving the TV and the PC world behind, entering the experience world

› Convenience› Comfortable› Social› Large screen

TV-screen PC-screen

› “All” content› On demand› Private › “Free”

TECHNOLOGY oriented

What, when, whereand how I want

My screen(s)

EXPERIENCE oriented

› My personal TV/Video experience

› Combining drivers from both (all) worlds


Paying for TV and Video Share of time vs. share of wallet

› The investments in money is not proportional to invested time› Future share of wallet will more likely resemble the actual share of time

Broadcasted TV/Video

(Basic+Premium TV)

43%

PPV2%

On demand/time

shifted TV/Video

55%

PPV4%

Broadcast TV

58%

On demand37%

€38/month 25 hours/week

Base: ALL

Average share of spending on TV/Video

Share of time watching TV/Video (inside the home)



Paying for TV and Video What is worth paying for today?

› Average monthly spending on TV/video: €38› Average monthly spending on Internet: €22› Compulsory monthly TV license: €10

~ €70/month Base: ALLSource: Ericsson ConsumerLab MSMC-study 2010

The things that consumers are

actually paying for today, without

hesitationEXTENDED SERVICES›Additional channels›Video on Demand

PHYSICAL FORMATS›Purchase DVDs›Rental DVDs

HARDWARE›TV sets›Computers›Mobile phones›DVRs›DVD-players

SPECIFIC CONTENT›Live sports›TV on demand›Series

BASIC ACCESS›TV platform›Broadband


Paying for TV and Video New values in a new landscape

› Low willingness to pay for online content today–

Internet mindset

–

Consumption on PC

› Future values–

From owning content to always access to content

›

40% thinks immediate access is very important–

Reintroducing the social dimension

–

Guidance, super simplicity›

More than 50% think simplicity is very important

TV/Video is, and will be, highly valued and appreciated. If done right, consumers will reallocate their TV spending to new alternatives



What About Digital Rights?

Respondents do not want to be limited in how they consume media › Little concern about media rights› Want full freedom› Anywhere access to everything they can watch on their

home TV

The ease of getting access to copyrighted content sets a important reference › Any commercial alternative will have to be able to

compete with other/illegal options concerning:–

Ease of use–

Access–

Content–

Price–

…



most important features and the willingness to pay for them

0% 20% 40% 60% 80%

Standard quality

Excellent quality

Free from ads/commercials

Usability, super simple interface(s)

The Wireless home

Time shift ("my" content, anytime)

A lot of broadcast TV channels

Immediate access

Technical support at home

In my native language

Personalised TV/Video content

Watch downloaded content

Watch on-demand streamed contentAccess to Internet on your standard

TV screenYour TV/Video on all devices/screens

Interactive TV

Recommendations and user ratings

Very important features

0% 20% 40% 60% 80%

Excellent quality

Free from ads/commercials

Standard quality

Technical support at home

A lot of broadcast TV channels

The Wireless home

Time shift ("my" content, anytime)

Personalised TV/Video content

Immediate access

Watch on-demand streamed content

Watch downloaded content

Usability, super simple interface(s)Access to Internet on your standard TV

screenYour TV/Video on all devices/screens

In my native language

Recommendations and user ratings

Interactive TV

Features worth paying for


Base: All

Usability is a hygiene factor, very important but taken for granted


most important features Building a “TV”-package

0% 10% 20% 30% 40% 50% 60% 70%

Standard qualityExcellent quality

Free from ads/commercialsTime shift ("my" content, anytime)Usability, super simple interface(s)

Watch downloaded contentThe Wireless home

Immediate accessWatch on-demand streamed content

A lot of broadcast TV channelsTechnical support at home

In my native languageAccess to Internet on your standard TV screen

Personalised TV/Video content Your TV/Video on all devices/screens

Recommendations and user ratingsInteractive TV

The consumers are requesting an easy to use, high quality, on demand service with no commercial brakes as their next TV service

Source: Ericsson ConsumerLab MSMC-study 2010Base: ALL

If you could select five features to include in your future TV-solution


The touchpad TV Remote


The touchpad TV Remote service ranking

15

18

19

13

17

18

19

21

22

23

22

22

6

6

6

7

5

5

17

11

8

0% 20% 40% 60% 80% 100%

Small Screen TV

Internet on thesmall screen

Touch screenremote

7 - Very interested 6 5 4 3 2 1 - Not at all interested / don't know

› Ease of use, control and enabling Internet in the TV without disturbing the experience is attractive!

When thinking about the different services/options in the concept. How interested would you be in having a portable, wireless touch screen that allowed you to do all the following things:

37% (top2)

35% (top2)

28% (top2)

Base: ALLSource: Ericsson ConsumerLab MSMC-study 2010

6

6

6


The touchpad TV Remote unlocking new potential

A problem when introducing new services and features into the TV is that they can interrupt and disturb the TV-experience

A social context An individual context

The touchpad TV remote enables private services and usage in the social TV-setting

The touchpad TV remote could solve these conflicts, allowing the consumers to stay in charge. This would enable:

› Introduction of new advanced services in a non intrusive way - E.g. voice, video and text communication, interaction…

› Easy PC-TV connection› Greater control of the digital home


New TV-services are often born elsewhere

in another context, this causes conflicts (e.g. Messaging on livingroom TV)

The TV-setting The PC-setting


fast facts and summary

› People are today spending up to 35% of their leisure time on watching content

› 93% still watch traditional broadcast TV every week› More than 70 % are “time-shifting” on a weekly basis› More than 50% are using internet based on demand TV/video every

week



fast facts and summary

› More than 50% would like to connect their PC with their TV just so that they can watch online TV content together with others

› On demand has only 40% share of wallet, but 60% share of time› 40% thinks immediate access to TV content is very important› More than 50% think simplicity is very important› 37% are very interested in a touch screen tablet connected to their TV


TV Consumer Insights 2010

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