Television: Entering the Era of Mass Fragmentation

Failure to do this will mean playing catch-up against other choices. At worst, failure to respond to market changes could lead to a provider’s extinction.

The current economic milieu is now making it all the more critical to have a deep understanding of consumer behavior. Indeed, today’s economy threatens to suppress consumers’ spending at the very moment they are choosing their preferred content experiences.

The time is now for providers to stake their claim to a sustainable and long-term position in the digital content landscape. The top-line message around the globe is that while demand for television content continues to grow, it is also fragmenting faster than ever before. This is partly because consumers are making firm decisions on which consumption experiences they prefer.

This means the industry is facing a moment of truth—content services and business models must grab consumers’ attention and harness this rising demand. If they do not seize consumers’ attention, they risk being left behind. The overarching challenge facing providers now is deceptively simple: create distinctive content experiences that consumers prefer and will return to time and again.

The Accenture Broadcast Consumer Survey 2009 is based on a detailed, questionnaire-led research study involving more than 13,600 consumers across 13 countries. As in previous years, we took pains throughout the research process to elicit the frank views of each interviewee through balanced and detailed questioning designed to reveal their true perceptions, aspirations and consumption habits.

The study presents key findings as well as the implications for media, technology and communications companies operating in this dynamic and fast-evolving sector.

For the first time this year, the study includes consumers in five countries in Asia alongside the existing eight from the Americas and Europe, enabling us to make global comparisons and conclusions.

We surveyed 13 countries: Australia, Brazil, France, Germany, Italy, Japan, Malaysia, Mexico, South Korea, Singapore, Spain, the United Kingdom and the United States. The survey took place between 1,000 and 1,100 adults aged 18 and over in each country. And we segmented the results by gender and age.

As consumers make content decisions, their loyalty to content brands and the expanding array of devices remains as strong as ever. They are following their favorite programs from network to network. Indeed, about three-quarters of our respondents—73 percent—say they watch the same or a greater number of networks than programs. Equally significant, while youth still leads the way in adopting new consumption modes, older generations are now catching on. The level of interest in new PC and mobile content experiences, and the degree of willingness to pay for content, are now growing as fast among consumers over 45 as among the younger demographics.

The proportion of consumers willing to pay for some type of content continues to rise—up by 12 percentage points since 2008. About half of consumers—49 percent—are willing to pay for programming from a digital service, while almost as many—40 percent—would prefer to watch ads and pay nothing.

We also noted a striking difference between emerging and developed content markets. Consumers in emerging content markets tend to be more interested in recycled television content. People in more developed content markets, however, generally want mobile to provide them with new content they cannot get on traditional TV.

Other findings:

• The number of people willing to watch TV on a computer increased from 61 percent in 2008 to 74 percent in 2009.

• People interested in viewing on mobile devices grew from 32 percent in 2008 to 45 percent in 2009.

• Interest in mobile content is much higher in Mexico, Brazil and Malaysia (up to 71 percent) than in the United States, United Kingdom or Germany (up to 26 percent).

The message is clear: a rising tide of demand is lifting consumption everywhere, across all platforms. According to our survey, where annual comparisons are possible, the proportion of people who view more than six channels and more than eight programs per week has risen across nearly every age bracket.

Meanwhile, interest in content on the PC and mobile is also up. This finding echoes recent studies by leading researchers such as Nielsen, which found that overall viewing via television, Internet and mobile devices has reached record levels in the United States.

Clearly, traditional TV is no longer the only game in town, and is being forced to compete in ways it has never had to before. The linear and proprietary connection from the service provider to the TV through the pipe has been cut. This has resulted in the television set becoming a large-screen device that receives input from a growing range of sources.

The same deconstruction of the traditional value chain is driving an expanding array of consumption platforms, each delivering distinctive content experiences. And our research shows that consumers’ excitement is at its greatest over platforms that give them what they want: control of their content.

While our study likely produced lessons and messages for a wide range of businesses, we have identified four that we think will impact all providers.

1. Help your viewers find the content they will enjoy—Consumers rely on friends and family to recommend content. You can gain a competitive edge by making it easier for viewers to tap into this trust network by linking them with their friends and family and their wider preference universe through Web and social network integration.

2. Streamline your product development lifecycle, using real data to make decisions—Reduce the cost of experimenting on new ideas and developing new products. Successful content providers rely on “product factories” that use shared frameworks and reusable processes, allowing new product releases to focus entirely on new consumer features.

3. Create and automate a true digital content supply chain—Consumers want specific, appropriate content that works for each device—and what they think is appropriate varies from device to device and market to market.

4. Support multiple business models, including advertisement, purchase, and subscriptions—Consumers are open to all kinds of payment models. So there is room for all of these models for different device/content combinations in different markets and demographics.