Now in its seventh year of publication, April 2013 The Battle for the American Couch Potato: Online and Traditional TV, and Movie Distribution contains 134 detailed pages of analysis. In addition to its own convergence analysis, sources include service provider interviews, data from annual/quarterly reports & presentations.
The audience for free online full-episode TV (not Hulu Plus, iTunes, Netflix, etc or walled garden requiring a paid subscription) has slightly declined. Based on the full-episode TV shows US Broadcasters & Cable Networks made available online for free in 2012, we estimate that on average 18% of the weekly viewing audience watched on average one-two episodes at a Broadcaster or Cable Network or one of their distribution partner’s websites (CBS Audience Network & Hulu/partners), down from 19% in 2011; we forecast 17% for both 2013 & 2014. We attribute the decline to the growth of Netflix (Amazon, etc), increasing DVR penetration, the rise of online advertising minutes associated with free full episode TV online, and less free and more authenticated online full episode Broadcast & Cable Network TV behind Cable, Satellite, Telco TV access players’ walled gardens. We estimate Broadcast (including local station) & Cable Network Online TV advertising revenues represented 3.1% ($2.35 billion) of 2012 US Broadcast/Cable Network TV advertising revenue, and forecast 3.4% for 2013. We estimate 31,000 US TV subscribers were added in 2012, down from 112,000 in 2011, and forecast 98,000 TV sub additions for 2013. 2004-2009 annual US TV subscriber additions averaged 1.86 million. Based on our TV Cord Cutting Model (takes into account economic conditions, annual subscriber additions, digital transition), we estimate 3.74 million (3.7%) US TV subscribers cut their TV subscriptions 2008-12 to rely solely on Netflix, Over the Air, Online, etc, 1.08 million (1.1%) in 2012 alone. We forecast US TV cord cutter households will reach 4.7 million (4.7%) by year-end 2013.
Source: The Convergence Consulting Group Limited.
Comments –The “estimate” is probably directionally correct, but indicates how difficult it is to obtain unauthenticated user behavior from a growing array of set-top-box, gaming consoles and mobile devices that operate on multiple networks obfuscated by packet encryption, proxies, gateways, API’s and Network Address Translation.
For me the primary takeaway is that providers are not solving the problems of consumers. Consumers needs and values are changing or in some cases fragmenting. Driven by technology, behavioral, social and economic realities. Solve For The Consumer (SFTC) not the market and certainly not for potatoes!