Monthly Archives: September 2016

US Connected TV Audience

By 2020, connected TV users will represent 71.2% of internet users and 60.4% of the US population, up from 68.0% and 56.1%, respectively, in 2016.

Smart TV viewers will make up an increasing number of the connected TV user base during eMarketer’s forecast period. By 2020, 34.4% of connected TV users in the US will watch on smart TVs, up from 26.9% in 2016.

Smart TVs won’t be the only growth category within the group of devices that make up the connected TV universe. Amazon’s and Google’s streaming devices will enjoy the most growth from 2016 through 2020, followed by Roku players and smart TVs. Apple TV and game consoles will grow more moderately, while Blu-ray players will remain essentially flat.

Connected TV users as a whole will increase by a compound annual growth rate (CAGR) of 2.68% from 2016–2020—a lower growth rate than that of every device listed separately except Blu-ray players. This suggests people will increasingly use multiple devices, driving up the growth rates of individual devices more than the category as a whole.

As is typical with connected TV data, the number of households closely follows the number of users, with an average of 2.06 users per US household during the forecast period. By 2020, there will be 97.7 million US connected TV households, up from 88.7 million in 2016. Much like the user figures, growth will top 20% this year and recede into the single digits next year and for the rest of the forecast.

A GfK study titled “Over-the-Top TV 2016: A Complete Video Landscape” found that 36% of US internet users owned connected TV devices in 2016, nearly double the 19% who did in 2014. This particular stat was limited to set-top boxes and streaming sticks, and did not include smart TVs, game consoles, or Blu-ray and DVD players, though the full study looked at all of the above.

Connected TV accounted for 20% of US weekly time spent viewing digital video in August 2016, according to a Frank N. Magid Associates study. Mobile devices made up a combined 33%, while the largest share, 46%, went to computers. Even though connected TV had the smallest share of the three major device platforms, it grew by a factor of 2.5 in the two years leading up to the study, according to Magid.

 

Mobile Game Space

Digital gaming has become a key area of interest for developers in India. One recent forecast from KPMG and the Federation of Indian Chambers of Commerce and Industry (FICCI) predicted the category would generate 30.8 billion rupees ($480.3 million) in revenues in 2016.

But companies hoping to profit from this gaming boom have run into roadblocks, particularly when it comes to mobile games. Rising competition from other developers, challenges building consumer awareness and players who aren’t interested in paying for gaming content are all key obstacles.

An October 2016 look at the habits of India’s mobile gamers by Mauj Mobile-owned mobile gaming site GamesBond found a primary challenge was the high volume of games installed on the typical gamer’s phone. The study discovered 30% of respondents—all of whom had downloaded at least one game from a Mauj platform—had six or more games installed on their devices.

This highly competitive environment makes it important for developers to have their games featured in a mobile app marketplace like Google Play. Among game developers in India surveyed by GamesBond for the same study, 30% said being featured by the app store was “critical,” while another 40% said it would take a long time to get noticed if they were not featured.

Even as competition for mobile gaming customers continues to increase, developers targeting consumers in India would be wise to broaden their approach to include other platforms. So-called multiplatform gaming, where consumers play games across multiple devices like PCs, tablets and gaming consoles, is increasingly popular among gamers of all ages in India. In fact, according to GamesBond’s study, 58% of mobile gamer respondents also used PCs to play, and another 23% used tablets.

Another Round with Games

Facebook beta-launched 17 games, including old school titles like Pac-Man and Space Invaders, which can be played in app, whether the user is on a desktop, laptop or, more likely, a mobile device.

While Facebook’s sharing and communications utilities are what made it the cultural juggernaut that it is, gaming has played an outsized part in its history, contributing a significant amount of its revenue in the early days, when it was still experimenting with ways to unlock the advertising potential of the platform.

A survey by AYTM suggests that game-playing is still a widespread activity on Facebook. AYTM found that almost half of social network users said they played games on social platforms at least occasionally, and half of those said they did so regularly. While the survey didn’t ask about gaming on specific platforms, Facebook users predominated the survey group—92% of those who said they used social networks were on Facebook.

The AYTM survey suggests that, at least at the moment, user interest in playing games on a social platform is not likely to change much. When asked if they were likely to play a social game in the next year, 38.7% said they probably wouldn’t —almost the same number who said they had never played a social game.

Some 15% of the time users spend on Facebook is devoted to games, according to a report in the Wall Street Journal, and games generate $45 million in monthly revenue, down from $65 million in December 2011, according to a Piper Jaffray estimate.

At that level, games make up only small slice of Facebook’s overall revenue. Most gaming revenues are accounted for in Facebook’s financials as “payments and other.” eMarketer estimates that such revenues will make up less than 3% of the company’s total this year. That revenue mix is not projected to change much over the next two years.

 

Vies for Cord

AT&T’s move into streaming TV makes sense as more and more consumers are watching digital content on their TVs, laptops and mobile devices through OTT services. eMarketer estimates that there will be 188.1 million OTT video service users in 2016, rising to 206.1 million in 2020. YouTube is included in eMarketer’s estimates. Because its audience is so large and well-established, it makes the growth of the entire category appear to be less dramatic.

Many OTT viewers have increased their digital TV and video content consumption after cutting the cord to cable TV. eMarketer expects the number of cord-cutters (and cord-nevers—those who never have had pay TV) to rise substantially over the next few years, growing from 17.8% to 22.6% of the US adult population between 2016 and 2019. AT&T’s move into the live-TV streaming space is a new way to offer potential viewers access to traditional live TV content that they would typically view via cable subscription.

AT&T is looking to attract subscribers with a variety of deals, including an introductory pricing option of $35 a month for a package of more than 100 channels. AT&T is also including a fourth-generation Apple TV to customers who sign up for 3 months of pre-paid DirecTV Now service, and an Amazon Fire TV Stick with 1 month of pre-paid service. Additionally, AT&T mobile customers will be able to stream the content via the DirecTV Now app without worrying about monthly data limits.

While these offers may be tempting for some customers, it may not be a deal-driver for many, said eMarketer analyst Paul Verna. “Price is one of the factors people take into account when choosing a pay TV service, whether a cable- or satellite-delivered one or a digital streaming package,” he said. “However, consumers are also picky about what shows, movies, sports, live TV, and local channels they watch. In that regard, they tend to select services based on how closely they match their wish lists, as opposed to simply choosing on the basis of cost.”

DirecTV Now’s content does come with some caveats. It reportedly does not offer consumers a DVR option, excludes CBS (which offers its own live streaming service) and does not offer local networks not owned by ABC, NBC or Fox.

AT&T also faces competition with other existing cable-like streaming services such as Sling TV and Sony PlayStation Vue. The market is expected to become even more competitive in 2017 with Hulu’s expected move into live TV, which will include channels such as ESPN, ABC and Fox, as well as YouTube’s new “Unplugged” service, which will offer a bundle of not-yet-announced cable TV channels.