No company has changed the TV business more than Netflix has, from funding to distribution to monetization. Ovum's latest consumer survey highlights the impact the online video giant is having on how consumers access TV – and the implications for the wider industry.
In our Digital Consumer Insightssurvey of 5,000 internet users in Australia, Brazil, Italy, the UK, and the US, we asked Netflix subscribers which screen they most liked to watch the world's most popular subscription video service on and why. The results are striking.
Figure 1. Most consumers prefer watching Netflix on smart TVs
The smart TV is by far the most popular screen with Netflix subscribers. Over 44% of respondents stated that the smart TV was their favorite screen for watching Netflix, compared to 19% for the second most popular device type, the PC/laptop. Size of screen (45%) and ease of use (31%) were cited as the main reasons for smart TV popularity.
Personal control is a major appeal of smaller screens, especially for younger viewers. For 16–24-year-olds, the PC/laptop was favored over the smart TV. The smartphone was also unusually popular (see Figure 1). The ability to "watch whatever I want" was much more important to these respondents, particularly for those living with their parents. Perhaps this is because they don't own or control viewing on TVs in their homes.
Apple TV, Google Chromecast, and Amazon Fire TV are having a more modest impact. Only around 3% of respondents preferred to watch Netflix via media streamers, despite 18% using one or more of these devices to watch premium video. This will be a disappointment to the likes of Apple, Google, and Amazon, which see these devices as a foot-in-the-door for extending their ecosystems to the lucrative TV market.
Operator strategies to partner with Netflix are working – to an extent. Although only 5% of respondents stated that the TV set-top box was their favorite device to watch Netflix, this percentage was between 15–20% for subscribers to pay-TV services that offer integrated access to Netflix. This percentage also skewed higher for subscribers to high-end pay-TV packages.
The smart TV will remain the experience to beat – or embrace. The bad news for operators is that 42% of subscribers to providers that offer integrated pay-TV/Netflix services stated the smart TV was their preferred way to watch Netflix. This fact, combined with lagging media streamer adoption and the likelihood that younger viewers will gravitate toward smart TVs once they move into their own homes, means pay-TV operators and internet giants alike must address the opportunities and challenges posed by smart TVs.
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