Free ad-supported TV a hit online, but only to the PC?

February 6, 2013

In the U.S. TV viewing is completely dominated by pay TV providers. With 90% of TV households relying on cable, satellite or telcoTV as their primary source of TV entertainment, one might be forgiven for thinking free TV was a dying industry. New data from the NPD group, however, shows that free TV isn’t a vanishing resource at all. It’s just moving online. The company went on to say that online TV streamers were mostly using PCs and that the importance of tablets and smartphones was overblown. However, other data suggests this might not be the case.

According to NPD, almost 12% of US TV watchers reported streaming shows for free online. This makes free TV sites like Hulu and about as popular as pay sites such as Netflix and Amazon Prime. What’s more, the company also says that over half of the streaming TV viewers are in the 18-34 demographic.

This is in line with Nielsen 3-screen data from the second quarter of 2012. Nielsen found that the same 18-34 year old group streamed the most video from the Internet. For example, 18-24 year olds streamed 40% more than 35-49 year olds. What is even more interesting is that the 35-49 year olds watch 43% more traditional TV than the 18-34 year olds. This seems to lend some credence to NPDs postulation that the younger age group is turning from shorter video clips and toward longer form TV shows.

Another statistic revealed by NPD was that 83% of TV streams were sent to the PC. This led NPD groups Russ Crupnick to chide the industry for “lavishing” too much attention on new devices such as tablets and smartphones. Is he right? Are companies such as Verizon and ABC wasting their time on mobile apps while they should be focusing on the PC?

New data from Conviva, a video streaming optimization company, seems to indicate that would be a mistake. According to Darren Feher, President and CEO of the company, a tier 1 U.S. TV content provider is seeing a very different split between devices for its streams. In January, just 32% of video streams went to the PC: almost half went to mobile platforms like the iPad and iPhone. At least for this premium TV provider, mobility is a critical platform for delivery. Focusing just on the PC would result in a lot of very unhappy viewers!

Conviva’s data seems to be corroborated by recent streaming data from the king of free TV from across the pond, the BBC. The company reported that, in October, nearly a quarter of all streaming requests came from mobile phones and tablets while the PC accounted for just over a half. In addition, the trajectories of platform usage are radically different. In just one year, PC requests had fallen from 65% to 52% while mobile platform requests had risen from 9% to 23%.

For free TV broadcasters, the NPD data suggests reaching out through the Internet is an excellent strategy for engaging younger viewers. However, eschewing mobile platforms for the PC probably isn’t the best way to go about it.