Study: Connected TVs in 30% of Internet Homes

Users prefer ad supported models for streamed TV shows over subscription and PPV models according to a new survey from YuMe and Magid

By George Winslow -- Broadcasting & Cable, 8/21/2012 6:00:00 AM

One of the most detailed studies undertaken on connected TVs to date has found that about 30% of all Internet homes have TVs connected to the Internet and that users of those TVs are generally receptive to advertisements and ad-supported business models.

The results are from a survey of 736 connected TV owners and users done in May and June of 2012. Digital advertising software and services provider YuMe commissioned consulting and research firm Frank N. Magid Associates, Inc. to conduct.

"The basis for the study was that connected TV has become hot topic in industry but like any nascent medium it is difficult to find baseline information that would help advertisers make informed decisions," noted Travis Hockersmith, senior director of client strategy at YuMe in an interview.

One key finding, Hockersmith noted was the opportunities for advertisers on the platforms. Almost 90% of connected TV users reported that they noticed ads on the platform, particularly pre-roll ads, with 60% noticing pre-rolls.

The majority of those users also interacted with ads and nearly one-fifth of users (19%) subsequently purchased a product as a result of an ad they've seen on connected TV.

"It reminds me very much of the early days of the internet, when users weren't yet bombarded with ads and engagement and ad recall were much higher," he said.

Users of connected TVs also seemed willing to watch ads in exchange for getting free content. "For TV length content, they would rather see ads than pay for the content," he noted. In contrast movie viewers were much more willing to accept subscription or PPV models.

Overall, 59% of viewers of short-form video on connected TVs and 44% of those streaming TV shows preferred viewing 15-30 second ads over monthly subscription or the pay-per-view model. For movies, however, more than 6 in 10 users preferred either subscription or PPV models over ad-supported viewing.

While some analysts have argued that connected TVs could hurt traditional multichannel providers, the survey found little evidence of that. "There was not a lot of evidence of cord cutting," Hockersmith said.

Like other surveys on this topic, the study found that game consoles were the most popular way to connected TVs, with 77% of connected TVs connected to a game console, 34% connected to a Blu-ray player, 28% being a smart TV with an internal internet connection and 25% hooking up a streaming device or set-top-box.

The numbers total to more than 100% because many homes connected their TVs to more than one device.

The living room was the most popular room to have a connected TV, with 52% reporting they had a TV hooked up to the internet in the living room, followed by the bedroom (47%) and the family room (29%).

The most popular connected TV apps were Netflix (with 52% saying they used the service), followed by YouTube (47%), Hulu (28%) and Amazon (19%).

Overall the connected TV users were young and skewed male.

About 24% of users viewed TV shows on networks several times a week, while 29% watched TV shows streamed from the internet multiple times per week.