NAGRA, a Kudelski Group (SIX:KUD.S) company, in partnership with UK-based TV research firm Ampere Analysis, released "Television Tribes," a study of pay TV consumer viewing types. The study, which surveyed consumers across 10 countries, identifies five unique "Television Tribes":
- Content Connoisseurs - a young, affluent and tech-savvy early adopter group who want everything on demand and are willing to pay for it. They are also the most likely to churn.
- Broadcast Bingers - a low-spending group best entertained when binge watching box sets.
- Digitally Detached - an older generation, harder to reach and least likely to spend money on pay TV content.
- TV Traditionalists - a middle-aged group of linear TV consumers most interested in the big screen, and particularly in sports.
- Super Spenders - linear TV consumers with money to spend to have full bundle access to content.
The research focuses on the Content Connoisseurs, the most valuable and fastest-growing consumer type, but also the most demanding, making up 24% of the global market. They are the biggest spenders, love their content and consume significantly more from SVoD sources than the average household. They want to assemble their own a-la-carte TV bundles and expect high-quality experiences across devices.
Nearly 80% of Content Connoisseurs cite online video platforms as their main source of TV and film content. They also predict their household will stop watching linear TV completely within five years, but their love of content makes them the most likely group to subscribe to pay TV services.
TV Traditionalists are the second most valuable group for pay TV operators. Representing 18% of market share, they are often overlooked in the multi-device and OTT era. This group is willing to pay for core TV services, including access to live sports and movies. They are also less likely to churn than any other Tribe, with only 9% saying they switched within the last six months.
The study suggests actions operators can undertake to help defend their market share, including: stacking the right services for each market segment, leveraging IP and cloud technology to launch new on-demand services, using multiscreen data analytics to improve customer insight and personalization, and securing premium content across all screens.
"As the distinction between conventional pay TV and OTT services blurs, understanding these TV tribes, which ones are the most valuable, and keeping them happy with compelling content, experiences and technology, is the first step for operators to unlock new opportunities and remain relevant in a new pay TV era," said Ivan Verbesselt, SVP Group Marketing, NAGRA. "A one-size-fits-all strategy will not maximize value. Meeting the needs of distinct segments of consumers is the key to attracting and retaining subscribers, and growing revenue. The successful operators of the future will be those who accelerate their transition to IP to gain more flexibility and meet evolving and diverse content consumption needs, enabling tech-savvy consumers to create their own next-generation bundle of TV and on-demand services."
Guy Bisson, Research Director, Ampere Analysis, said "The future is not about running from changes in the pay TV market, but embracing them. Successful operators realize that the world of paid content has moved beyond the simplicity of relying only on sports and Hollywood movies to drive subscription and into a business environment characterized by shades of grey. To succeed, operators must understand the very different demands of today's consumers and continue to give them what they want by embracing the opportunities offered by streaming services and content."