Is ‘OTT’ Overblown? Look At This Research


For those of you who don’t know what the acronym “OTT” stands for, we are pleased to inform you that the three-letter ditty is shorthand for “over-the-top” — as in, “Viewers are now over-the-top with their multitude of choices that don’t need to involve a MVPD, or even a broadcast TV company.”

The digital denizens have been actively pushing OTT for several months. The chatter over “cord-cutting” won’t cease, and it’s crippling big, established players such as ESPN.

But, is “OTT” really an acronym for “Overblown Technology Tweet”? New data from Hub Entertainment Research begs the suggestion.

Recently released data from Hub found that most TV content is being watched on a TV screen, rather than a smartphone, tablet or desktop computer.

OK, let’s pause right there. “Most TV content” is the subject. But, how is it being delivered?

Via the TV set-top box.

That’s right. While cord cutting is certainly a concern that should not be taken lightly, a majority of the 2,026 online respondents aged 16-74 who watch at least five hours of TV per week rely on the good-ol’ STB — that lovely device former FCC Tom Wheeler didn’t want you to have to pay a rental fee for while having the government take the lead on how to reinvent it.

When combined, set-top boxes, TV connectors and smart apps accounted for just under three-quarters of total TV viewing.

This, of course, is great news for MVPDs, and the American Cable Association. Maybe Matthew Polka is dancing a polka around his Pittsburgh headquarters right now.

After all, live TV — along with DVR and VOD capabilities — rule.

Sort of.

The percentage stands at 55%. That means 45% of regular TV viewers don’t use a set-top box.

Of course, as suggested above, that’s not because they’re streaming shows via a mobile device—at least among all respondents.

However, as seen in the chart below, teens act quite differently than their parents, or grandparents.

That’s what scaring marketers and media executives.

Meanwhile, the mushed mind of our editor-in-chief, who has fielded major consumer marketing research reports for a global multinational company based in London, instantly spat out the following question: Who paid for this study?

To get the answer to this question, along with several others we had about the “What’s TV Worth?” report, we reached Hub Research principal John Giegengack at his small privately held company’s Portsmouth, N.H., headquarters.

“Our clients are the TV networks, and the MVPDs, and the online guys,” he says. Sony Pictures Studios is also a client. “Basically, it’s everybody in the industry.”

That clears up one key fact about Hub’s study: It’s not a “research for hire” creation with a bias benefiting a single company funding the research.

John Giegengack

“We cover all the aspects of the industry in our syndicated studies,” Giegengack says. The “What’s TV Worth” study is one of six syndicated research reports released each year by Hub.

It measures which sources viewers believe offer them the greatest value, the factors that cause them to value some sources more than others, and how perceptions of value have changed over time.

What’s the biggest takeaway from this year’s edition?

“For an MVPD, it’s not as grim of a picture as what you’d read in the media,” Giegengack says.

That’s not to say there aren’t concerns. Viewership was driven 100% by the set-top box not-so-very long ago, he reminds us.

And, the respondents used for the study did not include individuals who watch up to four hours and 59 minutes of TV per week.

RBR+TVBR’s editor-in-chief would be among those individuals.

“We want to talk to people who are engaged enough so that their opinions and behavior are going to be important to the companies we talk to,” Giegengack explained.

Hub also only talked to people with broadband in the home. At present, that omits some 20% of the U.S. population.

Why did we press Giegengack for some clarity on how the research was compiled and presented by Hub? Accenture recently surveyed some 26,000 internet users 14+ worldwide about how they view TV programs. We had a lot of issues with Accenture’s findings, which were of a global nature, and with Hub’s U.S.-only research. As the findings were divergent, we had to pick up the Batphone and call New Hampshire.

On Thursday (5/11), The Wall Street Journal offered readers a glowing piece on Hulu, declaring the OTT service that marries original programming such as the excellent entry The Handmaid’s Tale with broadcast TV streams, “looks a lot like the future of TV.”

Hulu is a joint venture with The Walt Disney Company, Comcast, Time Warner, and 21st Century Fox.

News Corp. owns The Wall Street Journal.

For newbies to the media world, Fox and News Corp. have a guy named Rupert Murdoch in common.

Look, we get it: Hulu is indeed part of the future of TV consumption, delivered anywhere you have an internet connection. So does Giegengack. “TV is still the home base for TV viewing,” he says. “But that’s where we see the decline.”

What does this decline look like?

Yes, there is a decline. But, it’s a very slow drip, rather than a flowing spigot that can’t be stopped.

Meanwhile, to little surprise, subscribers to a cable or DBS service provider are also more likely to get an OTT subscription. But, has the rapid growth cooled?

Hub Research also examined why services from an MVPD are of benefit to consumers. At the same time, it asked it respondents what the strengths of Netflix are.

Here’s what Hub found:

Lastly, Hub looked at the amount of time Netflix subscribers allocate to live TV, compared to the amount of time they allocate to the OTT service.

Check this out:

OK, so 26% isn’t exactly 42%.

But, live TV is far from dead.

Giegengack says, “This study focuses on professionally produced TV content (long- or short-form) or movies.  It doesn’t ask about time spent on user-produced video or clips that on Facebook, Snapchat, etc. On other studies where we have covered those, the share for mobile devices, especially phones, is higher.  But for traditional TV entertainment, they’re still used situationally.”

With ATSC 3.0 set to revolutionize broadcast TV, let’s all dance the polka with our favorite beverage.

We’ll do it with the TV on.

RBR+TVBR Editor-In-Chief Adam R Jacobson

Adam R Jacobson is the editor-in-chief of the Radio + Television Business Report. He watches most of his programs through Xfinity VOD and the Xfinity TV app’s On Demand features; on Amazon Video; on Netflix; and via a Roku device added to the household in December. Live sports is the key reason cable TV services remain important; cable services are included in the monthly HOA fees.