Viewing of Online Video, Time-Shifted Content on Rise, FCC Report says
Consumers are using TVs that can receive digital video, using DVRs and watching online video on their sets in increasing numbers, said the FCC’s 15th Annual Video Competition Report, the full text of which was released Monday. As expected (CD July 22 p12), the report showed some shifts in consumer behavior toward alternative methods of viewing content, though it also shows the number of broadcast TV viewers remaining the same since the last report. Some cable attorneys told us Monday that little in the video competition report was surprising or unexpected, in keeping with what the draft document reportedly said (CD July 18 p1).
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But the numbers that show a shift toward online video are “telling,” NCTA said. “Without question, the video distribution marketplace is more competitive than it has ever been before,” said the association in a blog post.
Online video distributors are expanding their content, and consumers are increasingly watching it on TVs connected to the Internet, the FCC report said. There were 41.6 million Internet-connected television households -- with TVs accessing the Internet through devices such as video game consoles or set-top boxes -- at the end of 2012, according to estimates from SNL Kagan cited in the report. That’s up from 26.6 million in 2011, a nearly 15 percent increase, said the report that was approved at Friday’s FCC meeting. “More than 180 million U.S. Internet users watched online video content for an average of 20.6 hours per viewer in June 2012."
"Patterns of consumer behavior noted in the last report, including increases in the number of households” with HD TVs, penetration of DVRs and increased availability of broadband and mobile devices, “have continued,” said the report. In 2012, 85.3 million TV households had TV sets that could display digital video, an increase of nearly 10 percent from 2011. DVR ownership rose 8.6 percent to 50.3 million households in 2012 from 2011, said the report. “In addition, broadcasters are using a variety of mechanisms to respond to consumers’ desire to watch video on a time-shifted basis either on television sets or on other screens, including mobile DTV, VOD, and online video distribution."
The report said households that receive only broadcast video “held steady” at 9.7 percent since the last report. NAB disagrees with that figure. “The FCC only accepted research from Nielsen, who we believe fairly dramatically undercounts over-the-air (OTA) TV households,” said a spokesman for the association on Monday. “Our suspicion is that Nielsen significantly undercounts rural households, which have a higher preponderance of antenna usage.” The trade association pointed instead to a GfK report that the number of broadcast homes rose by 3 million. “At a bare minimum, we believe the FCC should acknowledge that there are different OTA numbers than what Nielsen claims, and that GfK’s numbers are dramatically higher,” said the spokesman.
The American Cable Association praised the report for including numbers showing a decline in cable systems and households getting cable. ACA had asked the FCC to study the declines and rising retransmission consent fees. “Although the report indicates that the FCC has not collected data on the reasons why these cable systems have ceased operations, it acknowledges that small systems lack scale economies enjoyed by larger competitors,” said ACA. The FCC’s acknowledgement of a problem could lead to rule changes, said the association. “Policymakers should take greater note of the economic fragility of small cable systems.”