We've just completed the latest analysis of our ConsumerMetrix survey from the end of last year, focusing on multiscreen TV. The first results were published today for the US and similar studies will be released over the next couple of weeks covering the key European markets.

The major finding from the US segment is that the TV screen is now most likely to be used for watching internet-delivered TV shows and movies, ahead of portable computers, desktop computers, smartphones and tablets. If we combine computers as one device category, they are still out in front, but I think it’s fair to argue that the desktop screen is a different category of usability from the portable PC, which after all is often classified by observers as “mobile”.

When we look at the trends in multiscreen usage over the past year or so we see that the divergence really began in early 2012. At that time the three major screens were similarly placed, but during 2012 it appears that the TV screen gained ground while the desktop PC in particular lost favour.

Overall we find that more than half of Americans are now watching TV and movie content delivered via an internet service at least monthly. Usage is weighted, not surprisingly, towards younger age groups, with more than three quarters of under 25s now qualifying as internet TV users. But it’s also catching on with older demographics: more than a quarter of 65 and overs are now going to the internet for TV and movies.

Apart from PCs and TVs, tablets and smartphones have also become an important part of the internet TV mix. Neither of these screens is yet as important as the PC or TV but their usage has grown significantly over the past year or so. Both are now used by around 28% of internet TV users.

We also examine how internet TV users are connecting their TV screens. The most popular approach is to connect a PC using an HDMI cable, but close behind comes the games console, which is used by 28% of internet TV users. Those two methods are some way ahead of alternatives like connected blu-ray disc players, connected TV players (eg Apple TV, Roku) and smart TVs.

When we look at the specific products internet TV users are using, the Xbox 360 takes the lead although it’s closely followed by the PS3. The leading smart TV for internet TV use is Samsung, and a similar number of people use Apple TV.

It’s a fragmented market, as we would expect in the early days of television’s latest evolution. Strategy Analytics will continue to track the adoption and usage of these emerging platforms in future survey waves and assessing how the multiscreen environment is shaping the future of television viewing.

Note: The ConsumerMetrix survey was fielded in October 2012 and consisted of n=2285 individuals in the US and n=4268 individuals in Europe.

David Mercer

As European cable’s annual get-together, Cable Congress, takes place this week in London, the latest analysis from ConsumerMetrix highlights an interesting contrast in cable’s performance as far its customers are concerned.

Using the net promoter score approach, we found a net overall satisfaction rating for broadband of 66% for cable providers, compared to 63% for other broadband providers (mostly telco/DSL). In television, by contrast, cable scored only 37%, compared to an average of 44% for other platforms.

The first thing to note is that broadband scores higher than television for all providers. It should be a warning to multiplay service providers, and those offering pay TV in particular, that consumers overall appear to appreciate broadband more highly than television.

For cable players the discrepancy is wider than for its rivals. This tends to confirm the intuition that cable’s real strength lies in broadband (with higher speeds, at least advertised, than its DSL-based rivals), while it struggles in TV, where it has been slower than satellite players to roll out new technologies.

As I wrote at last year’s event, the cable industry is caught in a pincer movement between higher value, technology-leading satellite services, and free DTT services. Already last year there were signs that cable is happy to accept broadband customers who are not paying for TV or video service:

“Manuel Cubero, COO of Kabel Deutschland, made a telling remark when he said that the German cable industry now thinks of broadband customers using OTT video services as its own video customers, and in that context the cable industry’s video or TV customer base is growing.” March 2012, David Mercer blog @ Strategy Analytics

Television still matters to the vast majority of customers, of course, so cable must deliver to those expectations in one way or another. As connected home technologies converge the opportunity to build on cable’s broadband strengths will increase, but content rights battles, the key competitive challenge, are here to stay.

David Mercer

Our latest ConsumerMetrix Bulletin examines the status of cloud media and “digital locker” services in the US. These have become a popular way to enable multiscreen media access since consumers no longer have to worry about where their music, video or games are stored. Examples include Apple’s iTunes Match/iCloud, Dropbox, Amazon Cloud Player and Google Music. The survey also asked about less prominent services such as Ultraviolet (the Blu-ray Disc-based service), Samsung Music Hub, LG Cloud, OnLive and Gaikai.

Our survey of more than 2000 US respondents found that 45% of people have used at least one of these services at some point. In total 27% of people have used cloud media services during the past month, and 15% at least during the past week. Younger demographics not surprisingly are the lead adopters: peak usage occurs in the 20-24 age group and falls away steeply above 35, although 25% of 65 and overs claim to have used a cloud media service at some time.

The leading service, again not surprisingly, is Apple’s iCloud, which is used by 27% of all respondents and by more than a third of all under 35s. Dropbox, Amazon Cloud Player and Google Music are the next most important services. Music is the dominant media type for most services but usage of video, games and other genres is not insignificant for all of the leading players. We'll be analysing the results for the European market shortly, although fewer such services have been available compared to the US.

As stores selling physical media continue to close in great number (HMV and Blockbuster just two recent examples in the UK) the signs seem clear: the next generation of music and video customers is quite happy storing media in the cloud, not on discs in their personal collections.

David Mercer

If there were any further doubts about the increasing prominence of today’s two most successful technology brands they are dispelled by the results of our latest ConsumerMetrix Technology Brand Preference Index. Tracking changes in sentiment over the past half-year, the survey found that only two out of 17 top international brands managed to increase their score significantly.

Samsung led the way with a rise of 4.4%, followed by Apple with 2.3%. Panasonic and Asus managed marginal improvements, but every other brand saw a decline in its brand preference score. Those worst hit were mobile-centric brands Blackberry (down nearly 10%), Motorola and Nokia (each recording falls of more than 4%). The industry will be familiar with the woes of these firms but it seems that consumer sentiment is not far behind.

Apple’s improved score has allowed it to leapfrog HP to third place in the table, but it remains some way behind Sony. Even though the Japanese giant slipped one point it remains firmly in second place (and perhaps contradicting the previous comment, since Sony’s troubles have apparently not led to a collapse in consumer support, yet). It is worth noting that Apple scores markedly worse in France and Germany than in other countries, but it has now overtaken Samsung to become the most preferred brand in the highest income segments.

Our survey asked more than 6500 consumers across the US and EU4 (France, Germany, Italy, UK) to indicate how likely they would choose a brand when considering buying technology products such as computers, mobile phones, TVs or related products. Importantly we ask people to consider what they know about these brands and what they normally spend on such products.

We’re not releasing the full set of data this time, but you can access the previous table here. The full rankings, in order of preference, are now Samsung, Sony, Apple, HP, LG, Panasonic, Dell, Nokia, Philips, Toshiba, Acer, Sharp, Asus, Motorola, Sanyo, Blackberry, Lenovo. We did include other brands in the survey, including “emerging” hardware brands like Amazon and Google, but we are saving those results for future analysis (and for our valued clients).

David Mercer

A short trip to Paris last week to meet France's leading multiplay service providers confirmed the degree to which Free has shaken things up since it launched low price mobile services at the beginning of 2012. The company's own data shows it had acquired a 5% mobile share by June 2012, with each major competitor suffering declining shares. The question on everyone's lips was simple: What can we do about Free?

Our latest ConsumerMetrix Bulletin confirms the impact of Free's mobile market entry: we identified 5% of French households which take the "quad play" from Free: home telephone, broadband, TV and mobile. In addition we found another 12% of households which take a triple play (the same services excluding mobile) from Free. As Free expands its mobile network coverage it is reasonable to expect a significant chunk of that 12% to add Free's mobile service.

Our research shows that Free's multiplay customers are relatively tech-savvy compared to their rivals: they own more smartphones, tablets and Apple devices, and are more likely to use connected TV (although they are equally placed with SFR on this last measure). They also have greater access to advanced TV services such as mobile apps, VOD, HDTV, programme search and series recording. Orange, SFR and Bouyges are understandably wondering how they can compete with Free’s advanced service offers at such low price points.

We found one chink of light for Free's rivals: surprisingly, perhaps, the company has similar levels of overall dissatisfaction with its TV service as SFR and Orange. And Free rates worst of the three main quad-play providers on customer service. They will have to improve many aspects of their service to compete with Free but at least SFR and Orange know that there is at least one weak point to attack.

David Mercer

It might be assumed that if you ask people whether they want to pay for something or get it free that the answer would be a slam dunk. Surprisingly, in fact, there are actually some people who recognise that they should pay for television rather than relying on advertising or public service funding to provide it free-of-charge (or free-to-view as the television world calls it).

In our ConsumerMetrix survey we have been asking people for the past three years how strongly they agree with the statement: No one should have to pay for television; all programmes, including all sports and movies, should be available to everyone and supported by advertisements or public funding.

The latest ConsumerMetrix report shows that there is a strong majority in both the US and Europe who agree with this opinion. Nearly half of Americans, and more than 70% in France think all TV should be free to view. There are also minorities who disagree: a quarter of Americans and 10% of French and Italian viewers.

It is also interesting to track the changes in the data over time. Since 2010 we have seen a significant increase in the number of UK respondents who agree that all sports and movies should be available free-to-view: the proportion agreeing with the proposition has risen from 49% to 54%, while the percentage disagreeing has fallen from 32% to 23%. This gives a net increase in support for free TV which is equivalent to more than 8 million people.

There have been less marked changes in other countries as well, notably in Germany, where the acceptance of pay TV has actually increased. One explanation is that Sky’s marketing campaigns and acquisition of premium content rights in Germany is actually persuading many Germans, who have been supposedly reluctant to adopt pay TV for many years, that direct payment is a justifiable business model.

In the UK we have seen Sky’s acquisition of new pay TV customers slow to a crawl in recent quarters: our survey suggests that personal financial circumstances have a lot to do with attitudes towards pay TV and therefore are likely to be having a direct effect on Sky’s business. Like everyone else Sky will be hoping that the economy turns round sooner rather than later so that these effects can be minimised.

David Mercer

Our latest ConsumerMetrix report suggests that Samsung is failing to capitalise on its leadership in the TV and mobile phone markets. Samsung is obviously a brand leader in each of these segments, but few consumers own more than one Samsung product, suggesting that the brand loyalty in TV and phones respectively is not transferring to other products. If we define a Samsung household as owning at least one Samsung TV, phone or PC (the products covered in this survey), we find that 80% of these households own only one of these products.

Another key finding is that 40% of current owners of Samsung mobile phones are likely to buy a Samsung phone next time round, while only 13% say they would buy an iPhone. By contrast, owners of Samsung TVs are equally likely to buy a Samsung phone as an iPhone (around 24% in each case).

We might well argue why owners of a particular brand of TV should necessarily be more inclined to buy a phone of the same brand – surely these products are unrelated and consumers are right in treating them independently? But that would suggest that brands have no influence in general across different technology products, which is difficult to believe. It certainly seems in this case that an improvement in communications with its TV customers could help Samsung fight off the threat from Apple’s iPhone.

David Mercer

Tomorrow's arrival of Sky’s dedicated OTT service, Now TV, breaks the final link with the set-top box as the historical lynchpin of the company’s revenue growth strategy.  Sky has offered online and mobile services for some years, but until now these have only been available to customers who also pay for a Sky set-top box. Now TV breaks that link for the first time and signals a new era for BSkyB as it seeks to grow its customer base on the back of the rapidly growing number of connected devices. Strategy Analytics projects that there will be 88 million connected TV devices and more than 100 million tablets and smartphones in use in the UK by 2016.

It’s a risky approach for Sky because customers who have previously used a set-top box might now decide the OTT approach is easier or, more critically, cheaper. The first Now TV prices are £15/month for unlimited access to the Sky Movies library as well as the Sky Movies live service, or £0.99-3.49 for movies on a pay-per-view basis. With a set-top box Sky customers must pay a minimum of £37.50 a month to access Sky Movies (basic Entertainment pack at £21.50 + Sky Movies at £16). So for customers who really only want to watch movies there is a potential saving of £270 a year.

All this assumes, of course, that Sky Now can be watched on a TV set, and initially it will be confined to PCs, Mac computers and Android smartphones. However connected TV devices, including Xbox 360 and PS3, will be added to the mix before the end of the year. That’s when we’ll begin to see the real potential of the new service, although it may cream off some tablet and smartphone owners as well in the early months.

The arrival of Sky Sports in Now TV will also be key. Sky Sports subscribers today must pay a minimum of £42.50 a month. Based on the first Now TV pricing model, we can expect Sky Sports on Now TV to be priced at around £20/month. This price point could prove very attractive to many potential customers who have been put off by higher prices in the past.

The big question for Sky is the threat of cannibalisation: will existing customers be tempted to downshift to OTT and abandon their set-top box? Sky will be watching Now TV’s early performance very closely for any signs of this, and will be carefully balancing the benefits of overall customer growth against any threat to ARPU. As our ConsumerMetrix Sky Customer Profile report showed, value for money receives the lowest rating by Sky's customers (see chart below).

These are interesting and potentially game-changing times for the pay TV industry.

David Mercer

Following this week’s eForum conference on free versus pay TV this week’s ConsumerMetrix Bulletin highlights a few key datapoints relevant to the debate. The full report has been made available for complimentary access.

As a number of speakers noted, including Sky’s Adam Kinsley, Head of Policy, the lines between pay and free are increasingly blurred. And if we broaden the question to consider people who pay in any way for video or television content, we can see that “pay TV” in the traditional sense is only one part of the story, albeit a very important one.

Our own ConsumerMetrix data suggests that only 10% of UK households have not paid for any form of television, online video or cinema visit during the past 12 months. We have segmented the UK TV household base into those who use a traditional pay TV service (61%), those who take a free TV service (typically Freeview, and a smaller number of FreeSat) but say that they also make some form of additional payments for television, which might include pay-per-view, additional subscriptions or other services. We are left with 33% of homes who say they use only “free TV”, but 7% are accounted for by people who also go online to buy video services, and another 16% who visit the cinema. These figures allow for people who have performed these activities at least once during the past year.

This survey wave did not include purchase or rental of DVD or Blu-ray discs, so the 10% estimate may be even lower if these were included. On the other hand, like most surveys, we are only including households with internet access: if we expanded to these households, which are presumably less likely than average to pay for television services, and by definition would not be using online video, the overall picture might shift a little towards genuine free-only households.

Nevertheless the point seems clear: many households are paying for video and television content in a number of ways, even if they prefer not to subscribe to a traditional pay TV service. The inclusion of cinema may be stretching the point a little, since the theatre experience cannot easily be replicated in-home, although this might suggest that there should still be growth potential in the home pay movies market if the experience can be improved. Sky’s new Now TV service, which launches in the near future, is clearly targeted at many of these pay TV refusenik households which nevertheless have money to spend on video services.

David Mercer

About fifteen years ago I was interviewed by a Korean television station which was examining Samsung’s plans to become a world force in consumer electronics. It’s difficult to imagine in 2012, but in 1997 Samsung was pretty much a no-name brand, or at best third-tier, in many parts of the world. I received one question which sticks in my mind: “When do you think Samsung can become a major global brand?”  And I remember my answer fairly well: “It will take at least five years to become globally recognised, but leadership may be possible within ten.”

Our latest ConsumerMetrix Bulletin demonstrates just how dramatically successful Samsung’s strategy has been. Samsung is now the most preferred technology brand in every single market, age group and income bracket included in our survey. To be fair, it only just scrapes in as number one in the highest income groups, where it is in a very close race with Apple and Sony. But there’s no doubt that Samsung’s strength is its appeal across all consumer segments.

Samsung’s number one position may surprise some people, given the enormous commercial success of one of its key rivals, Apple. From general media coverage, which Apple is clearly expert at managing, it might be assumed that Apple is streets ahead of any competitor. But our survey shows that while Apple certainly is a powerhouse with younger and more affluent consumers, its appeal is more limited with other segments. Since most of Apple’s competitors would swap financial statements in the blink of an eye, this does appear to raise the question: does overall brand preference actually matter? It clearly doesn’t offer the whole story for a comprehensive competitive analysis, but we do believe it offers valuable guidance on future consumer decisions and overall brand value.

 Apple’s success is even more recent than Samsung’s, having begun only with the launch of the iPod ten years ago, and even then its rise began slowly. It could be that Apple’s trendline is steeper than Samsung’s: if Apple’s preference ratings are growing more rapidly in different segments it may be on course to catch Samsung at some point in the future. We will be conducting further analysis of our ConsumerMetrix datasets to establish some guidance on these issues.

David Mercer