My sophomore year of college, my roommate and I tossed the idea of cutting the cord on our cable tv for months on end, never able to pull the trigger. The main hold-up was live sporting events, and our reluctance to give that up. I cannot even count how many times, “If only we could just subscribe to the channels we watch,” was said around the house. It seemed like such a simple idea, but it just was not available, and with monthly bills of $150+ coming in, we finally cut the cord. It made me really plan out the shows or games I wanted to watch, and getting creative where I could do so. Whether it be a restaurant, or a friend’s house, I was able to catch most of the things important to me.
Since that time, the prevalence of individual apps for network stations has risen incredibly fast. Most evenings now, I have no worries that I won’t be able to watch what I’d like, because there’s got to be an app for it. Some stations, such as NBC and CBS have divided their station out into two or more apps, one being for news and programming, the other for sports. In combination with these applications, other subscription-based services such as Hulu and Netflix have monstrous followings as well. In fact, subscription video-on-demand services are closing in on majority penetration of U.S. households. When asked why consumers cite convenience, cost, and ability to watch on mobile devices as the main driving factors that cause them to lead to subscription based services.
What does this mean for marketers?
Obviously, these changes are extremely important to marketers because they’re changing the TV/Video-on-demand industry, and we will have to adapt along with it. This shift puts a huge emphasis on exclusivity. If every station and network across the country has their own application, then most consumers will cling to the apps with their preferred content and programming. However, with these changes come a lot of exciting opportunities. TV has been and will be effective for many years to come, but a major downside is the lack of ability to capture data and analytics from the platform. The shift to digital video-on-demand, and subscription services will provide insightful, valuable information on who’s watching, when they’re watching, what they’rewatching, etc. At this point, marketing/advertising is not present on most of the video-on-demand/subscription services, but consumers are open to the idea. In a study done by Digitalsmiths, 68 percent of North American respondents said they wouldn’t mind seeing ads if they can view free content, 52 percent believe that ads give them a good idea of new and upcoming products/services they might want to try, and exactly 50 percent don’t mind seeing ads based on their shopping history. Additionally, 66 percent of participants wished the ads they would see would be for products that interest them.
Personally, I’m still “old school” in the fact that I think there’s nothing better than watching a sporting event on a huge TV, and really don’t enjoy watching on my cellphone. We are in the thick of March Madness, and the only outlet I could find to watch the games was on my cellphone, until I heard my roommate shout across the hall, “I just subscribed to the CBS app to watch the games if you want to join me.” Times are changing, and as a consumer and marketer, I’m excited!
Sources:
http://www.marketingcharts.com/online/whats-driving-the-growth-of-ott-services-66565/
http://www.marketingcharts.com/television/pay-tv-cord-cutting-accelerates-in-2015-66539/