Converging Media: The Olswang Convergence
Consumer Survey 2008
Introduction
Chapter
1 - The ubiquity of the internet
Chapter
2 - Watching television content on a TV set
Chapter
3 - Watching television content on a computer
Chapter
4 - Movies are different
Chapter
5 - Music - the first truly converged content category
Chapter
6 - Piracy and the power of free
Chapter
7 - Barriers and incentives
Chapter
8 - Visions of the future
Survey reveals respondents are rapidly embracing convergence
of media
17 November 2008
"Converging Media: The Olswang
Convergence Consumer Survey 2008", launched today,
shows respondents from the British public are adopting an
on-demand lifestyle of choice and control enabled by converging
technologies. The widespread take-up of online TV services
like the BBC iPlayer , along with significant penetration
and use of Sky+ and on-demand TV services (such as Virgin
On Demand) is delivering a wholesale change to the way in
which respondents relate to television programmes and, to
a lesser extent, movies. The consumption of audiovisual
content is beginning a transformation which may already
be reaching its destination for the consumption of music.
While there remain huge pressures for content to be free,
the hunger for people to watch "what they want, when
they want" creates real opportunities for content owners
and other businesses to profit from what is becoming a "Digital
Britain".
Olswang's fourth annual survey, conducted
in conjunction with YouGov, comprised a survey of 1,162
GB consumers (see note below), supported by a series of
in-depth online focus groups. The Survey and online focus
groups analyse the experiences and attitudes of four key
demographic segments whose adoption of new technologies
and use of them to consume content – legal and otherwise
- indicates the speed and scale of this convergence. The
four key demographic segments include two which would be
expected to ride the convergence wave – the "Tech
Vanguard" and the "Kids" (13 to 15 year olds),
as well as segments representing the "Mainstream"
and the "Laggards" – who help us to understand
whether convergence is happening for everyone or whether
there are some to whom it will never be of interest.
Choice and Control – here, now
and on a TV set near you
While more people still watch live TV
more frequently than any other form of television, large
numbers of respondents, the Tech Vanguard group especially,
are spending significant chunks of time watching programmes
on their TV sets from a variety of other sources: in particular,
DVD recorders, digital video recorders (DVRs) and personal
video recorders (PVRs) (such as Sky+), from which more than
a third (36%) are watching television content for at least
five hours per week; on demand services, such as BT Vision
and Virgin Media, from which 16% of Tech Vanguard respondents
are watching five hours or more per week; and television
programmes on pre-recorded DVDs (bought or rented), from
which 15% are watching five hours or more per week. This
behaviour is not limited to the Tech Vanguard; one Mainstream
focus group participant observed, "I…watch
a lot of "on demand" programmes…It means
I can be a lot more relaxed in the way I plan my life and
don't think 'did I set the recorder properly'."
The BBC iPlayer – the service
today for choice and control of TV shows
Almost a quarter (24%) of respondents
(and more than 40% of the Tech Vanguard) are watching through
iPlayer for at least one hour a week. 17% watch legitimate
online TV services other than iPlayer for at least one hour
a week and 9% (admit to) watching illegal online TV for
at least one hour a week. This adds up to a huge amount
of online TV. John Enser, Media, Communications and Technology
Partner at Olswang, said, "Our fourth Convergence Consumer
Survey shows that iPlayer has been the catalyst to transform
online television from a minority interest into a daily
activity, much as iPod and iTunes did for digital music."
The iPlayer is the service most used
by the overwhelming majority of the survey base to watch
online TV, with 69% of respondents using iPlayer more than
any other online service. Catch-up TV in particular is fast
becoming a part of daily life: of those watching online
TV, 6% (and 10% of the Kids surveyed) visit an online service
daily for catch-up content, 54% doing so at least weekly
and 81% doing so at least once a month.
The respondents are changing the way
they view traditional media and converging technologies,
and the potential of the computer as an entertainment device
is being embraced by many: "My computer also serves
as a hub for my consumption activities. For example content
from it is regularly converted and transferred to other
devices such as my iPod for mobile consumption"
– (Tech Vanguard focus group participant).
A hierarchy of content sources
A "hierarchy of choice" is
also becoming apparent as people become more sophisticated
in their consumption of TV content – if a person has
chosen not to watch (or has missed) something live, then
typically they would look to watch it on big screen TV recorded
from the PVR, or using an "on-demand to TV" service,
and only if it is not available through that route will
the content be sought online using a PC through a service
like iPlayer.
Those who embrace piracy, of course,
have a different set of choices - "I would look
at BitTorrent sites I always use. They always have the content
I'm looking for. If it's BBC stuff I'll look on iPlayer
first though" – (Tech Vanguard focus group
participant).
Challenges for online video content
Despite the success of the iPlayer,
significant challenges, in addition to piracy, lie ahead
for providers of online television services. Some of these
are new, others are well-known.
1. Resistance from Laggards:
The first new challenge is an apparent chasm between the
attitudes of the Laggards and the other respondents. The
survey methodology used means that all of the Laggards surveyed
are online and use the internet regularly for surfing, email,
and other activities. This was supported anecdotally in
the focus groups (perhaps most clearly with the comment
"If my internet goes down it feels as though my
arm has been cut off!")
However, for many of those surveyed,
this love of the PC and internet does not yet seem to be
developing into a love of using those technologies to consume
TV, music or other entertainment. Similarly in the focus
groups, some Laggards resent the TV "ruling" their
lives or simply don't want to use a computer to seek out
something they have missed: "I just see my PC as
a place to use the internet and don't bother watching TV
on it". It will be a challenge for businesses to
educate these people so that they also become consumers
of digital content, and not simply regard their computers
as information and communication devices.
2. What are your kids doing?
The second newly revealed challenge is to ensure parents
understand what their kids are watching online. This is
not just about illicit content; it is also about lawful
content. For example, in the online focus groups, the most
mentioned programme for online watching among 13 to 15 year
old Kids was Mock the Week, a post-watershed show on BBC2.
Other programmes are also watched against parental wishes,
as one Kid told us: "well, my mum and dad don't
let me watch Eastenders, and on the internet, you can view
it without them knowing =]."
3. Payment Among the challenges
revealed in previous Olswang Convergence Consumer surveys,
two remain at the forefront. Payment continues to drive
many people's choice of whether and what to consume online.
Over 70% of respondents would be encouraged to consume more
online TV content if they could do so for free and without
ads. But more worrying than what people would like to do
is the evidence of what people are already doing –
choosing illegal, free sources over legal, paid for ones:
"I don’t feel the need
to pay for content, as everything I want to see or hear,
from live footy to film, applications are all available
to me at the click of a mouse" (Tech Vanguard focus
group participant).
However, this does not mean everyone,
even among those pirating today, rejects outright the notion
of directly or indirectly paying for online content. Focus
group participants identified potentially acceptable payment
structures: the "bundling" of content as part
of a subscription to another service (e.g. "traditional
pay TV" or broadband), and potential incremental payment
for a high quality service.
4. Sofa and big screen. In previous
years, the Olswang Convergence Consumer Survey also found
that a key barrier to convergence was that people want to
watch television in the comfort of their sitting room. This
remains the case. However, some in the Tech Vanguard focus
groups have overcome this barrier, for example by connecting
their PC to their TV screen; a couple of our respondents
spoke of 42" screens on which they could display content
from their PC. Others spoke of the promise of devices such
as the Apple TV – what is clear is that many respondents
now see and understand the gap that such a device would
fill – and there is a real opportunity for mass-market
take-up of such products.
"Being able to access the internet
from the living room main TV will be the next big thing
for all users this will allow for a new market for downloading/streaming…"
Matthew Phillips, Media, Communications
and Technology Partner at Olswang, said, "Consumers
now have choice and control over what to watch and when.
However, this year's Survey confirms there remains a minority
of sceptics who reject this model and who may only be persuaded
once they have an easy way to watch online content from
their sofa."
Movies – the "experience"
triumphs (for now)
“I love to watch DVDs with
the family at home but it’s rare. We'd rather go to
the movie, make an event of it” (Tech Vanguard
focus group)
The mantra of choice and control takes
second place to the experience of cinema-going. Respondents
across all of the focus groups agreed that "Cinema
is still the best way to watch a good film". One
Tech Vanguard respondent explained, "That's why
the cinema is still popular, because of the experience capturing
you."
The next best thing to visiting the
cinema is the DVD, which remains hugely popular among consumers
– both for movies and also for watching TV shows.
For movie consumption, the pre-recorded DVD is the most
frequently used playback medium, with 53% of respondents
spending at least an hour a week watching movies from pre-recorded
DVDs and 41% watching TV shows from DVD for at least an
hour a week. One of the things the Survey highlights is
how the DVD's value is in part about its flexibility –
you can choose to play it on a large TV set in the sitting
room, in a laptop in your bedroom, or at a friend's house.
At least for the time being, the length
of time it takes to download a movie, quality concerns and
the presumed difficulty with taking a downloaded movie to
another device all add up to less enthusiasm for online
movies than for other forms of audiovisual content: "Plus
you get the bloopers and stuff which makes the dvd lol"
(Kids focus group participant); "I watch movies
at the cinema. I have downloaded a couple over the internet
but the content was not that good so don't think i will
bother again" (Mainstream focus group participant);
"...it would have to be a fantastic film to make
me sit here on this chair up to a pc" (Laggards
focus group participant).
However, there remain challenges –
people want their movies straight away after cinema release
and many are willing to get them illegally - "I
download films mainly through Bit Torrent. I recently downloaded
Iron Man as it's available online in good quality but isn't
out any where on DVD yet." [note – focus
group conducted prior to recent release of Iron Man]
Music – the first truly converged
content category
Music use has become truly converged
among many of our respondents, leaving aside the Laggards,
Listening to music that has been ripped onto a computer
from CD is an activity undertaken with a similar frequency
to listening to actual CDs, and listening to music downloaded
from the internet is approaching the same levels of use.
It is a similar story on portable devices which are used
"frequently" or "sometimes" by 81% of
the Kids but only 22% of Laggards.
14% of respondents download music from
legitimate sites at least once a week, and 10% admit to
downloading music from illegal sites at least once a week.
Where focus group participants acquire music legally, they
tend to use both legitimate digital services (notably iTunes)
as well as online and traditional CD retailers depending
on how many tracks they want and how much they like the
music.
Perhaps the most interesting fact revealed
by the Survey about music use is the move, especially among
Kids, away from the radio and towards YouTube. While the
music industry has looked to embrace YouTube and share in
its advertising revenue, it is notable that YouTube is also
seen by members of our focus groups as a "try before
you pirate" medium. One participant in a Kids focus
group commented, "I find stuff on u tube and use
this thing called hi-jak where you record it onto an mp3
from the video."
"Pirating isn't a crime –
it's a lifestyle" (Tech Vanguard focus group)
Across the survey base as a whole, 10%
say they download or stream music illegally, with 7% illegally
streaming/downloading movies and TV shows equally, and 4%
illegally streaming/downloading games. These figures are
likely to understate the true levels of piracy online, as
people remain reticent about admitting breaking the law.
Among our respondents, almost all of the Kids and Tech Vanguard
groups owned up to some levels of piracy with only two people
in the Tech Vanguard focus group expressing any moral qualms
about it. One reformed pirate admitted: "I used
to think it was OK to download but it has hit me more and
more that this is stealing, it's not OK for me to do this",
and later went on to say, "Its nicking it, it feels
OK but leaves an aftertaste".
The Kids group seemed more afraid of
getting caught than about any principled recognition that
what they were doing was wrong - "arnt they catchin
people who use it tho ...my mayte sed they wa! so i aint
usin it lol...if they catch u, u get a letter off the fbi
giving u a warning and if u break it u get put in prison
if ur over 16" [note – we take the reference
to the FBI to be intended to refer to the BPI – the
record industry's trade body and principal piracy enforcement
agency].
Some of the more sophisticated participants
simply felt it was a matter of choice and control - "Obviously
I would prefer to use legal services but none of them can
currently compete with the illegal ones. The chance of getting
caught is so minute to be a non concern".
Clearly the BPI and others involved
in the battle against piracy need to continue with their
efforts to educate people as to the ill-effects of piracy
and to seek sanctions against those who have no qualms about
piracy or fear of getting caught.
Our respondents' visions of the future
Some respondents lament the loss of
some of the "social" aspects of traditional TV
viewing – the "water cooler" moment and
the show that you just happen upon when browsing through
the channels – both of which are displaced in an on-demand
world - "I still prefer normal TV. I like talking
about some programmes like Top Gear with people the next
day" (Tech Vanguard focus group).
Whatever businesses in the digital value
chain believe, consumers have their own views of the future
of converging technologies:
"I can see the streaming
of music increasing. It is a good way to try before buying
and opens up your experience to all sorts of music I may
not have looked at."
"I expect a pay per month
system soon to be widely available, if not already. Where
you are allowed to download X amounts per day. Your files
will be available via the web to be played via any music
player within your car, computer, house etc CD's will
totally disappear in 5-10years I believe."
"I think you will have one
machine that is TV DVD computer radio, it will do 3d and
surround sound, have a web cam, and prob be voice activated.
maybe with an inbuilt coffee machine or beer dispenser
(joke, but who knows)"
"Being able to access the internet
from the living room main TV will be the next big thing
for all users this will allow for a new market for downloading/streaming
films"
There are clear opportunities to harness
this consumer enthusiasm for the new converging media,
as long as businesses listen to what consumers are saying
and look for ways to meet these demands in the emerging
"Digital Britain".
Note 1:
1162 respondents, made up of and 927 adults (18+) and
235 children (between the ages of 13-15).
For more information contact:
Verity Dephoff
0207 067 3003
verity.dephoff@olswang.com
|
Natalie George
0207 067 3018
natalie.george@olswang.com |
Notes to editors
Olswang is a leading business law
firm with a distinctive approach. Our pioneering and problem-solving
ethos has established a commanding reputation in the technology,
media and real estate sectors, as well as a wide range
of other industries.
Founded in 1981, the Firm has grown
to a team of over 600, including more than 100 partners,
across four offices in Europe. In addition, Olswang has
a formal alliance with a major US firm Greenberg Traurig
LLP and a long-established best friends network of leading
independent law firms throughout the world.
As more companies look for opportunities
to expand into new digital markets, Olswang's Media, Communications
and Technology Group has been at the forefront of the
convergence revolution advising world-class businesses
through to entrepreneurial start-ups. The rich diversity
of our client base ensures a broader perspective and,
as a result, deeper commercial insight. Our expertise
in digital media and convergence gives us unparalleled
insight into the latest technologies that are redefining
the way media companies connect with their customers and
enables us to advise our clients based on a complete understanding
of the technology available to them.
www.olswang.com
About YouGov
Founded in May 2000, YouGov is a professional
market research agency pioneering the use of the Internet
and information technology to collect high quality in-depth
data for market research and public consultation.
YouGov has pro-actively recruited
respondents from all ages, socio-economic groups and regions
of Britain. The sample for each survey is carefully selected
and controlled so that it is representative of the adult
population as a whole - or the specific audience that
the survey is designed to measure.
YouGov offers a full market research
and consultancy service, collaborating with other agencies
in Britain and abroad.
For more information on YouGov and
its services please contact:
Russell Feldman
Research Manager
Technology and Telecoms Consultancy
YouGov Plc
Email: Russell.feldman@yougov.com
Tel: 020 7012 6033
www.yougov.com
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