EY’s annual digital home survey of 2,500 UK consumers focuses on household viewing habits. It highlights the enduring importance of the UK’s terrestrial channels in a world where consumers have access to numerous digital content offerings at their fingertips.
• 56% of UK households say they mainly watch programmes on the five traditional channels, up from 46% two years earlier.
• 29% of households find it hard to keep track of their favourite content across streaming and traditional viewing services. This spikes to 52% for 25-34 year olds.
• 72% of consumers aged 25-34 say they get better value from streaming services than pay-TV. 61% say they would be willing to “cord cut” and build their own bundle.
• 24% would pay a premium to stream catch-up TV ad free, up from to 18% in 2017.
Battle for quality
However, traditional channels are losing ground to their digital competitors in perceptions of quality. Big budget investments by streaming companies into high profile dramas have driven a perception of a higher quality offering.
While traditional channels still appeal with the majority of older audiences, EY’s survey shows that they are losing ground in the quality debate with younger audiences. 59% of 45-54 year olds and 64% of 55-65 year olds believe that traditional channels show the best quality content. Whereas two-fifths (41%) of those in the 18-24 age range see streaming services providing the best programmes, and 37% in the 25-34 bracket. Nearly 40% of those in both 18-24 and 25-34 age ranges are in favour of traditional channels.
Keeping it traditional
Martyn Whistler, Global Lead Media and Entertainment Analyst at EY says: “The data hints at a growing appreciation for traditional TV among UK households. It may be at odds with the overall trend in viewing volume on these channels, as captured by audience measurement, but it does reflect rising perceptions of the value that these channels hold in the overall mix of content options.
“For traditional channels, the challenge is to convince viewers that they can continue to compete on both quality as well as the range of traditional choices. They need bigger and bolder innovation strategies that are built on their current strengths, but are not constrained by them. Without clear action they risk losing ground as competitive dynamics shift.”
Spoilt for choice but frustrated
EY’s report reveals that nearly one-third of households find it hard to keep track of their favourite content across streaming and traditional viewing services. The proliferation of different services means audiences must search across multiple platforms and channels. The more concerning statistic for providers is the level of frustration among younger audiences, who typically subscribe to and use a higher number of services. For the first time this figure rose to over half (52%) for 25-34 year olds, up from 40% in 2019.
Martyn Whistler adds: “Keeping track of their favourite content has become a frustration for many viewers. Having to jump from one service to another, just to find something to watch can sometimes be a negative user experience that is only likely to get worse as more and more services launch. Despite the experimentation with recommendation engines and content aggregation, this is a pain-point that service providers need to work harder to address.”
Cord cutting could soon become a reality
EY’s report reveals a sharp rise in the number of households that claim streaming services represent better value than more traditional pay-TV. For the first time, over half (52%) of viewers see more value in streaming, a marked increase on 44% the previous year. For 25-34 year olds, 72% of consumers believe they get better value from streaming. So far, the number of households cancelling their pay-TV subscriptions in favour of building their own bundle of streaming services, so-called “cord-cutting”, has been relatively limited but could be about to increase.
When consumers were asked specifically if they would be willing to cancel their pay-TV subscription in favour of solely online streaming services, 35% of households admitted it was a consideration. For those aged 25-34, the number who expressed a willingness to build their own bundle rose significantly to 61%.
Redefining the role of advertising
With the rise of streaming services alongside traditional broadcast models, viewer appetite for accepting advertising as part of their streaming experience has continued to decline in recent years, with 40% now stating they are more willing to put up with adverts on broadcast television than around streaming programmes.
For streaming services, there is a growing proportion of customers who are willing to pay to avoid advertising altogether. A year-on-year increase reveals one-quarter of households state their willingness to pay a premium to have streamed, catch-up services without advertising. Of those aged 25-34, typically heavier users of streaming services, are even more likely to pay to avoid advertising, with 49% stating a willingness to do so.
Praveen Shankar, EY’s Head of Technology, Media and Telecommunications for the UK & Ireland, says: “To maximise the advertising opportunities, content companies need to educate consumers about the value of sharing their data, and the benefits it can bring to them. This will enable the sharing of greater amounts of data and help develop a wider suite of options for advertisers.”
Praveen adds: “Content providers must stay focused on their audience. The public varies significantly in how they consume content, so personalising experiences through data and insights is vital. With a deeper understanding of customer preferences, content companies can deliver better quality services and be more strategic in how they invest in, utilise, price and bundle technologies together to reach audiences in the home.”
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Decoding the digital home 2020 is the first in a series of findings from EY’s annual research into household attitudes and habits towards technology, media and entertainment and telecommunications (TMT) products and services within the home. The insights from the online survey of 2,500 UK consumers, conducted in October 2019, opens the door into the nuances of today’s digital household.