Consumers prefer digital media players like Roku, Chromecast and AppleTV over live TV, according to the GFK study “Digital Media Players 2014.” Nineteen percent of US households own digital media players.
These preferences are changing consumer behavior, not just through cord cutting but because people who use these services find new shows and increase their TV watching. That’s good news for buyers and sellers of connected TV advertising.
Twenty-one percent to 36% of digital media player owners said they find new content through their devices, with Roku users most inclined to find new content.
The only way consumers said they prefer to watch live TV over content on their devices is if those devices didn’t provide a great deal of content. For instance, consumers who own content-light Chromecast preferred live TV.
A third of digital media device owners reduced or eliminated their pay TV service. That said, TV certainly isn’t dead, especially for live events.
“A certain amount of households have these players, but it doesn’t mean they’re giving up TV completely. A good chunk are cutting back on their pay TV service, but they’re still going there for sports, or have a subscription to access network apps,” said David Tice, the senior VP at GFK who authored the study.
Tice said devices like Roku ultimately will integrate with smart TVs.
But even if these devices go away, “the long-term business focus of content creators and distributors should be on the end game – identifying, getting built into and nailing down monetization from the devices that will make DMPs [digital media players] redundant,” Tice’s report advised.
Right now, the content space is fragmented. Roku is the only provider to stream Amazon Instant Video, for example.
“It’s competitive issues that consumers don’t care about but the companies do,” Tice said. “We saw that Chromecast comes up short in terms of video-related apps, and it really showed in the way people with Chromecast stopped using it.” Sixteen percent of users were inactive.
Producers with the best content will win as digital viewing becomes more prevalent, Tice said. Consequently, a company like HBO, which will unbundle its HBO GO service, has strong standing.
While digital media players are popular, the difference in device use between Roku and Chromecast users indicates the importance of quality content. In the immediate future, it’s unlikely that all live TV content will become available through such players. For certain advertisers, that may be a deal breaker.
The major networks only offer viewing through digital media players if the user authenticates through their pay TV provider. If these companies were to go at it alone, “it means going into competition with existing clients, and that’s a balancing act and a step no one has been wanting to make,” Tice said.
