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Understanding consumer motivations delivers an OTT competitive advantage

February 20, 2019 | By Rande Price, Research VP – DCN

With new OTT video services popping up daily, there’s fierce competition in the marketplace. Cord-cutting continues in the U.S. with just over two-thirds of consumers (67%) reporting pay-TV subscriptions, down from 73% in 2017, and 77% in 2016. PwC’s new report, A new video world order, studies consumers’ relationship with video content to develop five new motivation-based consumer profiles. In this competitive market, it is critical for content services to maintain strong viewer relationships, which start with understanding.

Here are PwC’s five distinct consumer profiles:

  1. Indulgists are consumers driven by consumption, be it video, technology, or just stuff. The indulgists is always looking for the latest gadget, premium service, and original content to purchase. They watch approximately 17 hours of content a week and at least 35% spend $100 or more on video content a month. The average age of indulgists is 37. Importantly, they are committed to their pay-TV relationship and see themselves as subscribers five years from now.
  2. Engagers are totally immersed in the content they view. Their average age is 34 and they consume approximately 12 hours of content a week. Seventeen percent of engagers spend $100 or more on monthly video entertainment. This segment wants to engage with video content and they like to post about the shows they are watch on social media. They are also more likely to be gamers. Engagers look forward to virtual reality intersecting with TV series for a personalized storyline experience.
  3. Fanatics, whose average age is 34, are willing to do anything to access content. They consume about 16 hours of video content each week and 20% spend $100 or more on video entertainment a month. This segment wants to access endless content, especially all in one place. They’re likely to be cord-cutters who now subscribe to multiple services. Fanatics can often be found binge watching.
  4. Connoisseurs tend to be more educated and are culturally focused when it comes to their video content. Their average age is 39 and they spend about 10 hours a week viewing video content. Eighteen% of connoisseurs spend $100 or more on video content a month. While they like television, they prefer to read. This segment is also more likely to be comprised of cord-trimmers than cutters.
  5. Traditionalists are overwhelmed by content choice and find comfort in watching live-TV. Their average age is 40 and they consume approximately 15 hours of content a week. Thirty-two percent of traditionalists spend $100 or more on video content a month. This segment tends to be older and often has TV on in the background. It’s used for both comfort and company. Traditionalists are more likely to use pay-TV to access content compared to going online or accessing an apps.

PwC mentions two areas of focus to increase consumer engagement: 1) better content recommendations and 2) a central access point for content and payment. Consumers report that recommendation algorithms are often reactive and recommend the same content over and over again. Thirty-six percent of consumers also report that finding content on streaming platforms needs to be easier. Further, consumers want to consolidate their content and payment into one place (51 and 50%, respectively).

PwC emphasizes the importance of maximizing the user experience to develop a competitive advantage in a very crowded video marketplace. Providers should understand the audience’s motivation for content. It helps to drive engagement. Content is not a one size fits all experience and it’s essential to build a positive consumer encounter at each step in the process.

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