Archive for July, 2014

TV

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TV SCREEN ALONE NO LONGER ENOUGH

With an array of online options for viewing media—not to mention the increasing amount of original content created for online audiences—TNS, a consultancy within WPP’s Kantar, says “video streaming services have become a disruptive influence on the traditional television business.” And while consumer’s preference is still television, a quarterly TNS study into consumers’ telecommunications behavior finds that TV sets alone are no longer enough to satisfy the appetite for content, driving the growth of online media and video streaming services.

The study of over 20,000 U.S. households found that more than one-third (34%) of households have streamed video within the previous month. Yet, the majority of these streaming households also purchase traditional Subscription Video service—cable, satellite or telco—and more than one in four (26%) watch both Pay TV and streaming, compared to just one in thirteen (8%) that only watch streaming video.

Even while the conventional model of “Pay TV Only” service still represents a majority scenario (55%), TNS says it is steadily becoming less commonplace. “The allure of streaming technology is furthering the fragmentation of the consumer video market, resulting in weaker brand affiliations, reduced customer loyalties, and higher defection risks across all video distributors,” notes TNS Vice President Frank Perazzini. Citing the emerging challenges from alternative channels, he says the sustainability of traditional Pay TV service could be vulnerable if new pricing models offer consumers access to the content they desire at lower rates than are available today.

Not that Pay TV providers are unaware of the new competition. To defend their still-dominant position, TNS finds that many are strengthening their offers in order to stay competitive through such enhancements as TV Everywhere and a variety of mobile apps, which seek to deliver customers a user-friendly interface for multi-platform and on-demand viewing.

Faster Internet speeds, more content, and more devices capable of streaming high-quality video have created a larger and still-growing audience for streaming video. One interesting finding in the TNS survey was that the prevalence of streaming behavior is both higher and growing faster among households that moved within the past year. Half (50%) of households which moved have used streaming in the past month, compared to less than a third (32%) of non-mover households. Furthermore, nearly one in six movers view only streaming video, compared to just one in fourteen non-movers. That could be a long-term threat to MVPDs, since nearly everyone moves eventually. “The considerably higher incidence of households that only view streaming video among Movers hints at streaming’s potential to supplant—rather than merely supplement—traditional cable, satellite, and fiber video consumption,” said Perazzini.

ADVERTISER TIDBITS

Author: admin

Local automotive dealers have a reputation as being tough clients, but even the crankiest dealer should be smiling these days. Automotive News says that as the year passed the half-way mark, we’re on a pace to see 16.22 million new vehicle sales, the best since 2006. Put that together with fewer dealerships in the country than 2006 and an average transaction price above $30,000 for the first time, and the chief analyst at Cars.com projects the average dealership’s revenue is about 20% higher than it was in 2006 and 77% higher than the recession-impacted numbers of 2009……Advertising Age reports there’s a price war raging among casual-dining chains such as TGI Friday’s, Chili’s, and Applebee’s as that sector needs to fight off competition from fast-casual chains like Chipotle that offer faster service and lower prices. Friday’s latest salvo in the price war is $10 per person for unlimited appetizers in a promotion slated to run through late August……Also in the restaurant business, Nation’s Restaurant News reports Darden’s new prototype for Olive Garden is meant to display a more contemporary look with elements like atmospheric lighting, marble countertops, overhead wood beams and a more prominent bar. Darden expects to remodel about 75 units over the next year at an average investment of better than a half-million dollars per location……We’ve only just passed the July 4 weekend, but chain drug stores that offer inoculations are already starting to get their supplies of flu vaccines for the 2014-2015 season. According to Drug Store News, Novartis started shipping vaccines just before the long holiday weekend……Home improvement retailers and some service businesses should continue to enjoy strong demand for a while—the latest study from the Home Improvement Research Institute found that 74.5% of homeowners were planning at least one home improvement project when the study was taken during the spring. Home owners on the East Coast and West Coast were a little stronger than the national average, with 77% of homeowners looking to do work. The Upper Midwest showed about three-quarters of homeowners planning projects, while the South, perhaps because outdoor projects could be done at other times of the year, trailed slightly at 72%……Craft breweries (smaller than 6 million barrels a year) as a group only command a 7.8 share of the beer market, but their numbers are expanding rapidly. The Census Bureau announced last week that the number of breweries in the country has doubled in the last five years—and over the last two years an average of 1.2 breweries have opened each day……Farmers Insurance says it is looking to add 85 Agency Owners in the State of Washington. It is offering special incentives to qualified military veterans and reservists to help tap the state’s growing consumer market.

ADVERTISER TIDBITS

Author: admin

AT&T will be the first wireless company to sell the LG Electronics smartwatch, which will be able to connect with Android phones and answer voice commands. The device, made in partnership with Google, sells for $299……Here’s some more encouraging news from TV’s number one advertising category—Automotive News reports business is so good that the Detroit 3, which historically shuts down some factories for summer vacation, will keep some of those plants going this year. Plans vary by manufacturer, but a Chrysler spokeswoman summed up the situation by saying, “We certainly monitor demand for vehicles and manage the production schedule accordingly”……Activity has already started as retailers compete for back-to-school business. Retailing Today reports Office Depot has kicked off its Gotta Get It! campaign, with more than 1,000 items for sale at $5 or less. Also this year, Kohl’s is teaming with OfficeMax to put back-to-school supplies in Kohl’s stores……Corporate intrigue is starting to grow at PetSmart, as two investment groups that own significant blocks of stock are calling for the chain to put itself up for sale. PetSmart’s Board of Directors is considering possible changes, but has made no commitments yet to sell the company…… Although Canadian company Alimentation Couche-Tard was unsuccessful in its attempt to buy Hess Corp’s retail division, it is still looking for more U.S. stores according to the CEO. Couche-Tard’s Circle K unit in the U.S. had an excellent fiscal quarter, with merchandise same-store revenues up 4.4% and fresh food offerings a growth area……There’s growing competition in what’s being called the “connected home” initiative, and Retailing Today reports Home Depot is now offering the Wink platform that can connect dozens of different devices made by fifteen different manufacturers. Items like garage door openers, ovens, and air conditioners made by manufacturers including GE, Honeywell, Philips, Rheem, and others can all be controlled through a free Wink app. Just one example of what could be done: the customer could turn off air conditioning after leaving, but could put AC back on before getting home……The latest study from the government finds that while the number of people dropping landlines continues to grow, the pace of people dropping home phones has slowed, possibly because of bundling with internet and TV packages. Currently 41% of U.S. homes use cellphones only……Anheuser-Busch and concessionaire Delaware North have teamed up to create a self-service beer machine called DraftServ, which will debut at Target Field for the All-Star Game next week.

Analyst Brian Wieser at Pivotal Research Group has been digesting the Nielsen cross-platform data from Q1 of 2014 which we reported on yesterday—and he’s offered some perspective on the viewing data. He calculated that online video via desktop equaled 4.9 billion person-hours, or 3.6% of TV. Smartphone video consumption is one tenth of this amount, he added. Tablet video is not explicitly included in Nielsen’s figures, but Wieser estimates all tablet content (app and mobile web, including video) equates to the same amount of time as online video—“implying to us that 5-6% of total TV consumption occurs on digital devices.”
He also noted that the heaviest users of streaming video continue to dominate streaming video usage: during 1Q 2014 18% of the population drove 96% of streaming, increasing the concentration of streaming video slightly. At the same, this population accounted for a near-proportional amount of TV: the 18% heaviest streaming video users still accounted for 16% of traditional TV viewing.
And Wieser got on his soapbox to preach about ad spending shares. “While we have long-quibbled with the notion that time with media should equate to spending on media, it is worth noting that by our estimates, total spending on TV advertising amounted to $63 billion in 2013.” Meanwhile, total spending on digital advertising amounted to $43 billion, or 68% of TV’s total vs. 35% of time-spent online. “If time did equate to money either too much is being spent on Internet advertising or too little is being spent on TV,” Wieser told clients. “Neither statement is necessarily correct,” he added, “It remains more accurate to consider that ad spending is always a function of ‘least-bad’ alternatives for a given marketer”—with TV still the place where large marketers can achieve reach and frequency for their message.