When People Look Around, Some Decide Streaming Services Are A Little Thin

If you buy into the hype about it, online subscription services like Netflix, Amazon Prime and a handful of others represent the inevitable trend, the sign that streaming video is flowing into a new river of content. There is some confidence those services will continue to take some cable viewers because they’re so convenient and portable. You can watch online anywhere. Or even Everywhere.

A new study by Gfk seems, at first, to confirm that conceptual advantage. Its new data shows that 41% of cable or satellite TV subscribers also buy into a subscription streaming service such as Netflix. What’s more, among people who have a subscription and also use cable-like VOD, 44% of them say they like the streaming service better.

And so, about here, if you’re reading the report, you would be concluding cable VOD services are just toast.



But amazingly—and I am amazed because there is a steady drumbeat of awe and expectation for online video services—the rest of the report pointedly says cable/telco VOD services actually begin to get higher marks once people start using them. People who start using VOD at least once a week then report that they prefer it, by a wide margin, 43% to 30% for streaming.

It’s as if these consumers are auditioning for an I Can’t Believe It’s Cable commercial.  

It seems to me, the only reason VOD is not a bigger trend is because cable doesn’t make watching video on demand that easy to do. It’s not well branded, or well advertised. Which is really weird considering cable controls that pipe. And cable is, you know, in the advertising business.  

Likewise, cable and broadcasters’ TV Everywhere efforts are sparkless, since, as this survey shows, only 23% have even heard of “TV Everywhere” — as bad as awareness was a year ago. And that’s a dismal figure, because GfK discovered through subsequent questioning, it seems 41% of them have used a TV Everywhere service. They just don’t know it.  

GfK in its new report says this marketing fail is “another long-time trap of cable companies—the lack of consistent messaging to consumers” because cable operators wants to do their own thing. (I’m not so sure another reason for the the failure is that cable’s VOD and TV Everywhere procedures seem to have been programmed by Rube Goldberg Jr.)

But one of the bottom lines is that previous GfK research reveals almost half of Netflix subscribers would switch to a similar service if their cable/telco service provided it. And that’s just it. In most ways, cable and telco operators do.

The report says that now comes “the hard part, particularly for cable: Messaging the consumer in a concerted way that will overcome the share of mind held by Netflix and other SVOD services.”

“It’s been a really lost opportunity,” says David Tice, senior vice president of GfK’s Media and Entertainment team, that cable/telcos aren’t doing more to grab on-demand audiences, or at the very least do a better job of letting them know what they offer. Cable made with CTAM, an industry marketing organization, to come up with some coordinated advertising and branding, which he says was good but not enough.

“People would be open to alternatives” he says. And Tice, who will present highlights of the study at the IIR Media Insights and Engagement conference in Miami on Thursday, says it’s unlikely that Netflix can keep its base of subscribers totally happy with the level of content it provides, without charging more than they have been. Which is a good time for happy customers to reconsider.

But it just might be that consumers have disregarded their cable VOD offerings for so long, the online streaming ventures have taken over the category.

2 comments about "When People Look Around, Some Decide Streaming Services Are A Little Thin".
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  1. Corey Kronengold from NYIAX, January 29, 2014 at 5:31 p.m.

    No mention of how long the OTT users were subscribers for. I suspect most people are happy initially, but churn through the most desirable content pretty quickly. You may sign up for Netflix to finally watch Breaking Bad, but then what? Ask a 1+yr subscriber how they feel about the content, and its probably not very much.

  2. Douglas Ferguson from College of Charleston, January 29, 2014 at 5:37 p.m.

    You can always tell when dinosaurs are afraid of extinction by the way they dismiss higher forms of life. Methinks they doth protest too much.

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