Year-over-year increases in online searches for pay TV and bundle product packages suggest pay TV remains popular with consumers, according to Compete analysis of research by the Convergence Consulting Group.
Product Visitors Gain Interest in Pay TV Products
Despite increasing popularity of online TV viewing (see below), measurement of site traffic to the websites of major telecommunications companies and multiple service offerings (MSOs) demonstrates that consumers are showing heightened interest in pay TV products.
In Q1 2010, 36% of online product visitors viewed video/pay TV product pages, a nine-percentage-point increase from 27% in Q1 2009. This percentage steadily increased during 2009 and actually peaked at about 39% in Q4 2009 before slightly slipping the following quarter. On a volume basis, video/pay TV product pages saw an additional 1 million online visitors in Q1 2010, compared to Q1 2009.
In contrast, broadband, which led the four major product categories of voice, broadband, video and bundles in Q1 2009 with about 55% of all site traffic, saw that percentage dip to about 51% by Q1 2010. This represented a slight uptick from about 50% in Q4 2009.
More tellingly, site traffic to bundle product webpages sharply increased between Q1 2009, when it measured about 40%, and Q1 2010, when it led all categories with more than 60% of site traffic. Since bundles generally offer broadband and pay TV services, this further demonstrates that consumers are not looking to abandon pay TV, although broadband remains a TV viewing channel of interest.
Telcos Retain Market Share Lead
MSOs have heavily advertised against telcos for market share of pay TV and other media products this year. Based on consumer traffic, this did not prevent telcos from maintaining or possibly increasing their market share for most of these products.
In Q1 2010, almost 90% of online product visitors viewed telco bundle product sites, compared to a little more than 80% in Q1 2009. Site traffic to telco broadband product sites stayed flat at roughly 85% during that time.
In addition, between Q1 2009 and Q1 2010, slightly more online product visitors went to telco video product sites, and slightly fewer visitors went to telco voice product sites.
Online Video Viewing Grows 16%
Online video consumption rose 16% from 2008-2009, to an average of 22 minutes, according to The Nielsen Company. Of note, approximately 44% of all online video is being viewed in the workplace. Research shows that Americans watch network programs online when they miss an episode or when a TV is not available. Online video is used essentially like DVR, and not typically a replacement for watching TV.
About the Data: Companies included in analysis are AT&T, Cablevision, Comcast, Cox, Time Warner, and Verizon. Product visitors is defined as traffic to any “Learn” or “Shopping” pages, and includes “Ad Landing” pages.