Meet the 'Video Explorers'—the Next Important Group Advertisers and Programmers Need to Know Better

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While more than one-third of households have an Internet
connection for their televisions, only about 13% of all viewers say they have
used it to stream content on their TVs, according to a study conducted by
Discovery Communications.

Yet these "Video Explorers," as Discovery labels
them, will prove to be an important segment for both programmers and
advertisers to reach as they continue to exert their influence over what shows people
watch and which brands they buy, according to Pam Pearce, director of ad sales
research, and David Ernst, VP of ad sales research, for Discovery
Communications.

As more of the viewing audience turns to streaming and
further fragments live TV watching, it is going to be incumbent on media
buyers and planners to have as complete a demographic profile as possible on
these Video Explorers, who will no longer be reachable as part of that traditional
live mass TV audience.

"With increased fragmentation, advertisers will need to
aggregate audiences to a great extend to reach across many platforms,"
wrote Pearce and Ernst in their study analysis. "The good news here is that
most Explorers are not looking to avoid advertising as a motivation for
streaming. And, just as with DVR adoption, we can expect that those who are the
most anti-advertising have already adopted some over-the-top or streaming
behavior.

"Our study points to the fact that the quality of
programming will be more vital than ever as a key to retaining viewers as
audience shift their behavior," they added.

In the study, conducted last October, Discovery's researchers polled 293 viewers over
age 18 from among the 15,000-plus members of the Discovery Influencer Panel, an
ongoing custom research group that the network taps into for various studies. The
293 viewers were randomly selected and the survey was conducted via an online
questionnaire.

To be part of the panel, viewers must watch one show among
the Discovery family of networks at least once per week and cannot be employed
in the media or advertising industries. Each panel member is required to
complete an extensive profile.

Research conducted among the Influencer Panel indicated that
while connected or over-the-top devices are important to the Video Explorers,
they are not the first, second or even third choice when they sit down to
watch. Their initial instinct is to either check what's on the DVR or go directly to the channel that has a program
they already know they want to watch.

The study found the primary motivation for Explorers to use
streaming and over-the-top devices is to search for content. Two-thirds of
Explorers are paying for additional content services, with Netflix being the
most popular additional service.

The study also found that the desire to be cord-free is a
less significant contributor to seeking streaming options. Less than 30% of
Explorers said they are adding streaming services to cut down on costs by
avoiding cable fees.

Overall, the penetration of streaming devices right now is
small compared to the more mature devices used in conjunction with TVs, such as
DVRs, tablets and iPads. The survey found that only 19% of respondents have a device
to stream video on their TVs such as Roku, Boxee or Apple TV, while 93% have a
DVR, 60% have a video game system or a DVR device, 23% have an iPad and 18%
have a smart TV.

For both streamers and non-streamers, the largest percentage
of their monthly TV viewing is still done via live TV, although the percentages
vary. Among persons with streaming devices, 30% of their monthly TV viewing is
done live, compared to 46% among non-streamers.

When asked about their preferred method of watching content
on their TVs, 42% of the Video Explorers or streamers said their DVR was first,
vs. 32% who said live TV and 18% who said streaming. For non-streamers, 53% said
that live TV is their preferred method of watching content on their TV,
followed by the DVR (38%).

Among streamers, 29% check their DVR first when sitting down
to watch TV, followed by 26% who go directly to a TV channel they know their
favorite show is on. Another 16% check their favorite channels to see what's on and 13% go to the program guide.

Among non-streamers, 27% check their favorite channels
first, 26% check their DVRs first, 22% go to the program guide and 20% go
directly to the channel they know their favorite program is playing on.

Among streamers, Netflix was named by 71% of respondents as
a streaming service they subscribe to, followed by YouTube (42%), Hulu (24%),
HuluPlus and Amazon (21% each), network websites (15%), Popcornflix (12%) and
iTunes Videos (9%).

A little over 41% of streamers feel the streaming services
they use are on par with their current subscription TV services. Another 12%
believe they are much better and 18% believe they are somewhat better, but 26%
also believe they are somewhat worse and 3% believe they are much worse than
pay-TV services.

As far as frequency among streamers goes, 24% do so daily,
12% do so five to six times per week, 26% do so two to four times a week, 12%
stream weekly, 6% stream less than once a week but more than once a month and
21% stream once per month or less.

What is the motivation for streaming TV programming? In the
survey, 65% of streamers said they do so to catch up on past episodes, and 59% each
said they watch movies, stream to increase the variety of their content and
stream to access content unavailable through cable subscriptions. Also, 50% said
they also stream to discover new content, 29% said they do so to avoid
commercials, 29% do so to cut costs and 21% do so to avoid cable or satellite
subscriptions.

While 56% said they stream to search for
programs they usually watch on TV, 65% also said they browse until they find a
show that looks interesting, though not necessarily something they've seen
before. Only 29% search for programs recommended by family and friends and only
12% browse for programs by network.

The study can be viewed here.

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