Strong European preference for PC for online video, but business models challenged
Joseph O'Halloran | 01-11-2012
New research by Parks Associates analysing broadband and pay-TV services, business models, and consumer preferences has found that in some countries viewers prefer PCs over TVs for watching video, with a strong corresponding preference for free online video sources.
The analyst noted that broadband penetration is above 70% in several Western European countries, and up to 30% of the general broadband population — and nearly 30% in Italy and 40% in Spain in particular — prefer the PC to TV as a video platform compared with US viewers, where only 13% of broadband households would make the same choice.
Yet even with this clear trend, the aforementioned strong corresponding preference for free online video sources could mean that it could not truly be monetised. Parks Associates found that 44% of French video service subscribers would switch to a provider that offers free on-demand services. Pay-TV penetration among French broadband households is approximately 81%, and 58% of UK broadband households have pay-TV subscriptions. In France, 18% of current pay-TV subscribers have downgraded their service to a less expensive TV package within the last 12 months, and another 14% are likely to downgrade. UK pay-TV subscribers are relatively satisfied with their service; only 8% are likely to change to a new provider within the next 12 months.
"The growing online population in Western Europe creates a significant audience for premium pay-TV and digital media services, but building revenues continues to challenge providers because consumers are largely using free sources for video viewing," said Patrice Samuels, research analyst, Parks Associates.
With this in mind, the analyst advises operators to experiment with free on-demand programming and advertising-based offerings to promote their premium services and other products.