Commentary

Web Connected TV Users Prefer Ads Over Fees For Video And Streamed TV

According to YuMe and research firm Frank N. Magid Associates, 30% of all Internet homes have TVs connected to the Internet, and users of those sets are generally receptive to advertisements and ad-supported business models.

Almost 90% of connected TV users reported that they noticed ads on the platform, with 60% noticing pre-rolls. The majority of those users also interacted with ads and 19% of users subsequently purchased a product as a result of an ad they've seen on connected TV.

Travis Hockersmith, senior director of client strategy at YuMe, points out that “... like any nascent medium, it is difficult to find baseline information that would help advertisers make informed decisions... much (like) the early days of the internet... users weren't yet bombarded with ads... engagement and ad recall were much higher... “

59% of viewers of short-form video on connected TVs and 44% of those streaming TV shows preferred viewing 15- or 30-second ads over monthly subscription or the pay-per-view model. For movies, however, more than six in 10 users preferred either subscription or PPV models over ad-supported viewing.

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Hockersmith continued, “... users of connected TVs seemed willing to watch ads in exchange for getting free content... for TV length content, they would rather see ads than pay for the content... movie viewers were much more willing to accept subscription or PPV models.

The report note that game consoles were the most popular with Internet connected TVs, with 77% of connected TVs connected to a game console, 34% connected to a Blu-ray player, 28% being a smart TV with an internal internet connection and 25% hooking up a streaming device or set-top-box.

Other significant findings from the study include:

  • The living room was the most popular room to have a connected TV, with 52% reporting they had a TV hooked up to the internet in the living room, followed by the bedroom (47%) and the family room (29%)
  • The most popular connected TV apps were Netflix (with 52% saying they used the service), followed by YouTube (47%), Hulu (28%) and Amazon (19%)
  • Overall the connected TV users were young and skewed male
  • About 24% of users viewed TV shows on networks several times a week, while 29% watched TV shows streamed from the internet multiple times per week

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1 comment about "Web Connected TV Users Prefer Ads Over Fees For Video And Streamed TV".
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  1. Herb Lair from CUO,Inc., August 27, 2012 at 8:02 a.m.

    Similar to my thougths on changing cable TV business model
    Behavioral Based Social Media System for the Cable TV Market

    Cable has long history of failing to develop 1-1 target marketing. Canoe Ventures (latest MSO venture) was touted as the Holy Grail of targeted advertising and is reportedly less than a success.

    http://www.businessinsider.com/jason-kilar-here-are-my-thoughts-on-hulu-and-the-future-of-tv-2011-2

    Excerpt from above link on February, 2011 Business Insider
    Identifies advertising market being missed by Cable TV operators
    The obvious alternative, with the least cost to implement is an independent Cloud CRM solution designed to cross index cable subscriber households with their corresponding social network interests. The current regulatory and privacy issues experienced by cable TV operators gathering unauthorized data from set-top boxes could be minimized, by validating subscriber and even eliminated by essentially having an opt-in plan (provided conveniently by the social media). Access along with profile and interests of households would be controlled by the subscriber’s social media platform of choice. Facebook has high consumer acceptance and could be used for household profiles, product interests, social interests, and viewing entertainment interests. There would be incentives to the subscribers to opt-in including notification and reminder of viewing favorites, Groupon type ads, and specific ads matching interests with infomercial type group discounts and urgency to buy.

    The current design of target marketing advertising ventures is fundamentally flawed. They focus on demographics, and fail to identify the individual behavioral current and future household interests.

    I would propose using a data cross indexing similar to a data warehouse project I was involved with at iN Demand. http://www.indemand.com/ .

    Project would involve developing a bidirectional Cloud interface program using a CRM application between the social media and MSO subscriber records and communicating behavioral marketing - business advertising, discounts, specific videos/groups, family albums – providing subscriber awareness of TV programming -- movies, products, etc. similar to Amazon and Groupon. This would make subscriber stickier and substantially reduce turnover.

    To paraphrase a comment I made in the CED 1999 publication about the Internet, cable TV operators need to become the new best friends with the 600 million members of social media.

    Paul Case CEO of Spectralliance Hey Herb,
    I always read your twitter and facebook comments and insights on social media with great interest. You are an original thinker! I am most interested right now in the new players in the video/media spaces as the traditional cable/satellite PayTV remain resistant to adaptation in this quickly changing environment.

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About the Author

Jack Loechner is the Editor of The Center for Media Research's daily Research Brief. You can reach him at jack@mediapost.com.