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The results of a new research study - published today - and conducted by Forrester Consulting on behalf of Cisco, investigating consumer viewing habits and expectations of TV and Internet-delivered TV reveals that consumers are dictating where broadcasters, service providers and production companies invest their time and money when developing new technologies and services.
The study shows that continued consumer interest in next generation TV such as high definition TV (HDTV), 3DTV, on-demand and live streaming are pressuring major broadcasters and service providers to improve standards and offer a broader, more integrated service.
It's not just consumer's interests that are causing this sea change; it's their viewing habits too. Multiple generations of TV viewers are creating new markets and relationships for media companies. For example, simultaneous Internet use while watching TV is a common activity among young consumers now. Over 60 percent of those aged 16 to 35 watch TV and browse the Internet at the same time, and most likely to do so on a laptop or PC, as this age group is the least likely to own a TV set.
"With video predicted to make up more than 91 percent of all internet traffic by 2014, it is clear that the growth of online video represents the next significant stage in the development of the Internet. This is part of a major shift in the way content is delivered and consumed but it also represents a challenge to Internet Service Providers and media companies. The fact that consumers hold ISPs and content providers equally responsible for any drop in video quality is a clear sign that these industries need to work together to ensure that are able to deliver a consistently high quality service to consumers," said Phil Smith, vice president and CEO, Cisco UK and Ireland.
Young Consumers leading development of 'Social TV'
'Social TV', the idea of discussing TV online while watching it, has much greater interest to young consumers aged under 25. Among 16 to 24 year olds, 47 percent like to chat online with friends while watching TV, compared with 20 percent or less of those in older age groups. Similarly, 28 percent of 16 to 24 year olds like to discuss the TV programme they are currently watching online with friends, compared with under 10 percent of all older groups.
This audience will be most likely to embrace simultaneous consumption of TV and Internet video. Coupled with the age group's device ownership, it's a fair indication that in the future a shift to Internet TV and interactivity will become more commonplace across all ages groups.
Alongside the ubiquitous home computer, new devices such as tablets and large screen smartphones are now enabling online TV consumption anywhere in the home. The freedom these wireless devices enable has significantly changed consumer TV viewing habits. 70 percent of online UK consumers now access the Internet in the living room, making it the most popular part of the home for web use.
Quality over Cost
While Internet Service Providers may choose to charge consumers a premium for faster speeds or a better quality of service at the same price, currently broadcasters don't. Interestingly, the study shows 22 percent of consumers say they would pay for better video picture quality, if they could guarantee it.
According to the Forrester and Cisco study, young consumers would not necessarily object to paying for premium picture quality and prefer to pay per item for media, rather than the traditional subscription payment model. This parallels the pre-pay model that has proved popular in the mobile industry and led to tremendous mobile adoption by teenagers.