Archive for August, 2011

MediaPost Publications Understanding The Video Consumer 08/18/2011.

From MediaPost:

“According to the Nielsen Cross Platform Report, Americans are spending more time watching video content on traditional TVs, mobile devices and via the Internet than ever. Overall TV viewership increased 22 minutes per month per person over last year, demonstrating moderate growth and remaining the dominant source of video content for all demographics. Even the lowest fifth quintile of TV viewers still averages an hour of TV consumption per day, with the highest quintile tuning in for nearly ten hours per day.
Mobile video viewing continues to see marked gains, with the number of Americans watching video on their mobile devices increasing 41% over last year and more than 100% since 2009. Time shifted TV continues to grow, both in the penetration of DVR devices in the home and the time spent. Internet video streaming also saw increases in time spent; this behavior is the highest among a younger and diverse subset of the population.

“Over the past year, satellite and telephone company-delivered TV subscriptions increased while subscriptions to wired cable decreased slightly. Broadcast-only households remained stagnant. Two thirds of TV homes now have an HDTV, an increase of more than 20% over last year. Slightly less than half have a video game console or a DVR, 45% and 40%, respectively.

“African-Americans watch the most video content, including traditional TV and mobile video, though less timeshifted TV than the general population. Asians have emerged as the hands-down leader in time spent watching video on the Internet, averaging six-plus hours more per month than Whites and nearly four hours more per month than the next closest ethnic group, Hispanics. Asians also watch far less traditional TV than the general population-more than a third less than Whites and half as much as African-Americans. Like Asians, Hispanics watch less traditional TV but more Internet video than the general population, but to a less extreme degree.

“Satellite, broadcast-only and wired cable delivery of TV content is nearly even among three of the four ethnic groups tracked, with Hispanics being the outliers. They are more likely to get satellite or be broadcast-only than Whites, African-Americans and Asians, and much less likely to get wired cable.

“Age plays an interesting role in video audience consumption across media, with the age groups 25-34, 35-49 and 50-64 each dominating a specific platform. Traditional TV viewership steadily increases with age, so it comes as no surprise that Adults 50-64 make up the largest segment of the traditional TV audience (25%). The largest segment of the Internet video audience is Adults 35-49 (27%), while the largest segment of the mobile video audience is 25-34 year olds (30%).

“The new trend among our TV and Internet homes shows the lightest traditional television users streaming significantly more Internet video via their computers, and the heaviest streamers under-indexing for traditional TV viewership. This behavior is led by those ages 18-34.The group of consumers exhibiting this behavior is significant but small. More than a third of the TV/Internet population is not streaming, whereas less than 1% are not watching TV.

“Hispanic mobile subscribers are the most likely to have a smartphone, while White mobile subscribers are the least. The greater use of smartphones could be linked to Hispanics watching more video on their mobile devices than the general population. Likewise, the availability of Spanish-language channels available on satellite continues to drive the increased number of Hispanics who opt for satellite-delivery of their TV content.

“Cord Swapping: Debunking the myth that consumers are no longer willing to pay for television content subscriptions, Nielsen found that 91% of TV households still paid for a TV subscription in Q1 2011. Instead, evidence points to a slight reshuffling of the method selected, whether cable, through telephone companies or satellite.”

Last week the New York Times took a giant step into the present. It started behaving the way entrepreneurial early-stage businesses behave. Unlike most successful mature companies, the Times is trying to embrace the culture of the startup by bringing its customers into the development process.

The times launched Beta620, a public site for many of its experimental projects, and asked the public to sign on and help them evaluate the projects and suggest how to improve them or even more projects. Under the headline “What’s Going On”, the Times described the site and their goals this way:

“Welcome to beta620. At The New York Times, our software engineers, journalists, product managers and designers are constantly striving to create new and innovative ways to present news and information and interact with our readers. Yet it’s often difficult to try out new inventions on the world’s largest newspaper Web site. That’s why we created beta620, a new home for experimental projects from Times developers — and a place for anyone to suggest and collaborate on new ideas and new products.”

Successful, mature businesses focus on staying successful. They don’t put out products until they are ready for prime time. They don’t want to jeopardize a successful business by presenting something that might not be perfect. The fear is that the consumer might interpret something less than perfect as a defect and lose confidence in the brands behind billions of dollars in profits.

Contrast that attitude with Google, where new products are labeled “Beta” for years, and evolve based on continuing and considerable consumer reaction. New features are added to products after they are suggested by actual users. Besides having the advantage of making your customers feel empowered, the process serves another purpose: it helps Google see changes in consumer behavior as they are happening. The success of new business frequently comes from understanding the consumers better than a more traditional business that may cling to old consumer habits long have they may have changed. For example, don’t just keep pushing DVD’s if the public is now watching shows on digital platforms. Traditional DVD businesses wither while new companies like Netflix and Hulu grow quickly using multiple new forms of distribution.

I remember how frustrating it was in 2006 when I was negotiating to put CBS TV shows on Google. Google hadn’t yet launched Google Video, nor had they bought YouTube. CBS was nervous about how their shows would look on Google TV, and pushed Google on making sure that the viewing experience would be as close to perfect as possible.

The Google folks basically told CBS not to worry. “We just call it Beta and let our viewers test for us and tell us how it’s going. We’ll just keep the “Beta” on the site as long as we want so people will understand if the video freezes or refuses to start.” To emphasize the point that this was a work in progress, the Google management team wanted CBS CEO Leslie Moonves to join them on stage wearing Lab Coats as they introduced the product to the Consumer Electronic Show in Las Vegas.

The horrified look on the faces of the rest of the CBS management team said it all. No, Leslie Moonves would not wear a lab coat. The CBS people pushed hard for guarantees that the video would be perfect before the launch (those guarantees never came…and how could they? Who could guarantee anything involving the public internet?

The clash of those two cultures was symbolic of the ongoing relationship between traditional businesses and the emerging digital royalty. While the CBS’s of the world were right to protect their brands because those brands had built multi-billion dollar businesses, the Googles of the world were also right to engage their audiences in the process of product development, because they recognized that so much is changing so fast, it’s virtually impossible to keep up with changing consumer habits unless you track them in real-time. Public Beta tests do exactly that. The difficulty in that world is to make sure you don’t overreact to real time data…instead opting for continuous evaluation and analysis, and regular testing.

In both worlds the companies ultimately have to trust the instincts of their smartest people. But the difference is the quality of data they have to inform their decision. In today’s world, much of it has to come directly from customers or consumers in as close to real time as possible.

In today’s digital world, over time nearly every company has to become a media company. That is a cornerstone theory of my book C-Scape. The “C” stands for the four themes of change that every company, media and otherwise, has to embrace: Content is king, The Consumer is in control, Convergence is changing your business and Curation is a new skill you much embrace.

Today I got an email from the fast-growing digital shopping business Gilt, known for it’s daily sales of high-end branded products and services.

The email announced the launch of “Park & Bond,” which it described as a “new shopping destination for men.”

But let’s look at what they say you will find there:

Curation: “A curated selection of the world’s best brands, available when and where you want them.”

Consumer: “The Ability to see how virtually every item appears as part of a head-to-toe look”

Content: “Tools and Content designed to help men build an amazing wardrobe and get the most out of it, from personal shopping to buying guides and how-tos”

Convergence: “Park & Bond. It’s the New Intersection of Men & Style”

To be sure, Park & Bond is a shopping site from a commerce company, Gilt. But as a new digital business it proves that it understands the most fundamental issues around doing business today. Companies must provide much more for their customers, and create the kind of experience that helps them do everything they need to do in life, including shop. It’s simply good business.

Consumers face an overwhelming set of choices for everything they do, from reading a magazine to watching TV to buying a shirt to taking a vacation. Increasingly they need and appreciate guidance and intelligent curation of their choices. Park & Bond provides consumers with all kinds of helpful information, from “How to” stories helping some of the more style-challenged members of the male species, to details on fashion trends and advices on what to look for when buying clothing and accessories. And the context of the answers is how the customer uses the product, not how it’s sold or who sells it. There are also cultural guides and and advice on taking care of clothes.

In order to succeed as a consumer business in the future, businesses are going to have to give them more and more help in quickly and easily making the best choices they can.