The Battle For The Eyes Of The Consumer Has Been Raging For Some Time Now

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The battle for the eyes of the consumer has been raging for some time now.

The battle for the eyes of the consumer has been raging for some time now. The term was first coined way back in 1996 in an article examining the rise of digital experiences in the home. Since that time, through the advent of the internet, smartphones, Wi-Fi and non-linear television.

The battle for the eyes of the consumer has been raging for some time now. The term was first coined way back in 1996 in an article examining the rise of digital experiences in the home. Since that time, through the advent of the internet, smartphones, Wi-Fi and non-linear television, things have advanced dramatically. The connected-TV medium is still in its infancy and a wide range of newcomers are entering the market, whilst strategies for success are still being formalised. With consumer’s attention being the ultimate goal the lines are shifting as we enter the beginning of the end, or at least the end of the beginning, of the Battle of the Living Room.
How has the television landscape has evolved in recent years?
Over the last 12 years ...
... there has been a shift in the viewing habits of television watchers both in the UK, USA and around the world. Terrestrial services; once the kings of the television broadcast have been squeezed from different sides by increasing competition from satellite and cable services. In the UK alone this has led to a 40% drop in viewing figures for terrestrial services over that same period, which shows that consumers for the most part are willing to pay for premium subscription services providing the content is there. Interestingly enough however is the impact on those same satellite and cable services which the global economic slowdown is having, with Comcast reporting losses in terms of number of subscribers particularly in the low income household brackets. In essence people are turning back to free-to-air programming due to cost implications in light of the recession.
Additionally the influx of internet delivered programming and OTT services such as Netflix and Lovefilm have further impacted the existing subscription market by offering a simple entry to content delivered on demand and possibly at a price point which suits the consumer better than the high price subscription model. Responding to these ‘cord cutting’ internet streamed services also is the recent creation of new lower priced, or entry level service offerings by TV giants, such as ‘TV Essentials’ in the USA from Time Warner Cable and the new ‘Now TV’ from BSkyB in the UK, both set to take on the new OTT upstarts at their own game.
This diversification of core offerings shows that ultimately even the heavyweights in this battle are still struggling to call the plays long term and that ultimately the tide is turning and the consumer is able to demand that services that are more tailored to their requirements, more cost effective and deliver the content they want, where they want it and when they want it.
Spotlight on the major players, both the old guard and how they are adapting to brash new market entrants
The advent of broadband and the internet has mean that no longer do viewers require an aerial, cable or satellite connection to view the content they know and love. Cord cutting or the move away from fixed services such as linear TV, satellite and cable services has been on the rapid increase ever since the proliferation of fast internet connections, and boy, are the existing TV providers feeling the heat?
The latest developments sweeping the globe and capturing large swathes of viewers are flexible, consumer tailored and cost effective OTT services such as Miniweb’s woomi across Europe, Mediaset Premium Play in Italyand particularly Netflix in the US and UK. These services which enable the viewer to receive the content they specifically desire when they want it, across multiple devices both in and out of the home makes static, contractual pay-TV services seem very outdated, and in fact are beating the old guard at their own game by cornering the VOD market. Netflix alone has amassed a whopping 20million members worldwide and is starting to even throw its weight around in terms of content purchasing having increased it spend on content from $180million in 2010 to an impressive $1.98billion reputed in 2012. It seems the new boys are really packing a punch.
Responding to these challenges Pay-TV operators and developing their own version of OTT services to compete with the likes of Netflix. Now TV from BskyB in the UK and TV Essentials from Time Warner Cable in the US are offering customers pay on demand services without the contract thus building on their breadth of experience and customer loyalty, despite Now TV not being branded as Sky, to attempt to claw back some lost ground to the young infiltrators. Despite subscriber figures slowing for many established Pay TV services, by offering an entry level service and a diversified product line means that companies such as Sky are actually bucking the trend and continuing to drive ARPU (average revenue per user) up year on year, a testament to their understanding of how best to tackle opposition.

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