Online video services’ future growth may be predicated more on downloading than on streaming models – and more on free ad-based content than on paid content – as younger consumers spend more of their disposable time online, according to research from Ipsos Media.
As part of a wider survey of online US adults on technology and media trends, consumers were asked to rate their overall preference for a variety of online video service models if they were going to use them to view their “favorite TV shows.”
The service models tested included streaming-only and downloading-only versions of both fee-based video services and free, ad-subsidized versions. Among the most interesting findings:
- First, there is significant consumer appetite for free, ad-subsidized online video services, in this case specifically for television programming.
- Second, there is a division in preference among younger and older consumers in general:
- Younger consumers – those age 18-34 – prefer downloading longer-form television programming online.
- Consumers 35 and older have a greater affinity for streaming television programming content.
While today there are very few options offering legitimate free downloads of original television programming on the internet, the data suggest there is significant latent demand for these types of services, according to Adam Wright, director with Ipsos Media.
“Directionally, it’s clear the younger generation of consumers have a stronger preference for downloadable options when it comes to accessing television programming on the internet. Many of these consumers have grown up downloading music online, and simply want similar flexibility in how they access television programming online,” Wright said.
“The challenge for many in the space will be to crack the code on how free downloadable television programming could co-exist with the other traditional video delivery models for delivering an advertising audience.”
Younger Consumers Flock to Video Streams & Downloads
Whether downloads or streams, online video services are quickly building an audience with Americans – particularly younger consumers:
- Online adults age 18-34 spend more time surfing the internet (13.1 hours per week) than they do consuming any other entertainment media, including watching TV (12.3 hours per week).
- Older counterparts age 35-54 and 55+ still consume more TV (watch 15.2 and 16.3 hours per week, respectively) than any other entertainment medium.
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- Roughly two-thirds of online adults age 18-34 have streamed a video from the internet in the previous 30 days; nearly three in four teenagers have done so.
- Far fewer online adults are downloading videos – just over one in four (28%) have downloaded a video file online in the previous 30 days – a modest gain compared with the end of 2006 (23%).
A closer look at the relationship between downloading and streaming reveals that an overwhelming majority of online video consumers have accessed video content using both acquisition methods.
For example, two in three adults age 18-24 have downloaded and streamed video content off of the Internet. The data underscore a similar trend noted earlier: the older the market segment, the greater the reliance on streaming vs. downloading as the primary way to access video content online.
A number of factors are likely influencing these trends, including a far greater number of free, ad-subsidized video streaming options online in comparison to free video downloads. Other behavioral-driven factors are also likely contributing to this trend, Wright explained: “Perhaps what’s most striking about the data here is how this illustrates older consumers’ preference for the broadcast model for watching video.”
He added: “Given what we know – that younger consumers love online video, and are the most likely to prefer downloadable video content online – the question now is just when will video downloading begin to take off in the US, and what impact might this have on traditional video delivery models.”
Wright concluded: “Clearly, younger consumers are growing an affinity and expectation for downloadable video content, but they are also spending an increasing amount of their disposable time surfing the internet, so we may be witnessing the gradual shift in how the next generation will consume video content. As opposed to broadcast models, these consumers want to possess video content so they can view it when and where they want, whether in the living room or ‘on-the-go’ from a portable device.”
“The digital medium is really about empowerment, and video sites that enable younger consumers to access the television content they want in the format they prefer will be in position to quickly build an audience with this highly sought after market.”
About the study: Data for this study were collected through an internet-based sampling and data collection methodology using the Ipsos US Internet Panel, and reflects the online population (18 years and older). A total of 1,033 respondents completed the online questionnaire between October 19 and October 25, 2007. Additional data was sourced from Ipsos Media’s MOTION Summer Wave study, which was conducted via telephone interviews among a representative US sample of consumers aged 12 years and older in July 2007.
