What Viewers Really Want

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If there were a spot market for video futures,
2012 would seem to be the year to invest. Television ad
projections for 2012 are robust — thanks to the quadrennial
bounce from the presidential election and Summer
Olympics — and consumer trends promise even greater
demand for high-quality video in the years ahead.

Much of this demand is driven by the proliferation of
smart phones, tablets and a host of other devices that allow
consumers to view TV programming and movies virtually
anywhere they desire. To wit: Some 350 million devices
worldwide are capable of accessing YouTube, according
to Google. If anything, that statistic is an understatement;
U.S. consumers already own more than 105 million smartphones,
61 million-plus game consoles and more than 20
million tablets.

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It has been less than two years since Apple announced
the first iPad on Jan. 27, 2010, yet investment bank J.P. Morgan
expects nearly 100 million of the tablets to be sold
worldwide in 2012, and eMarketer forecasts that nearly 55
million Americans will use an iPad at least once a month
this year. Not surprisingly, it is hard to find a major operator
or programmer that has not launched some kind of
tablet or mobile application.

Yet behind a wave of consumer buying lie some dangerous
eddies. As financial markets continue to fluctuate,
the recovery from the worst recession to hit the U.S.
economy since 1948 has been slow. Unemployment rates
are higher than they’ve been in decades, and that has has
encouraged some consumers to reduce spending on multichannel
TV. Plus, the housing market is still in a deep
funk, which means fewer new homes are hooking up to
cable.

How some of those economic realities are interacting
with the hockey-stick consumer trends in video consumption
is a major theme of Multichannel News’ Viewer Watch
2012 report. Consumers certainly want to access video on
any device, anywhere, at any time. That directive is so
strong it has almost become a cliché.

But who is going to pay to prepare and deliver that content?
How can operators and programmers cover those
costs and continue to build their businesses in a period
when cash-strapped consumers are unlikely to accept
hefty increases to their pay TV bills? What are some of the
most promising new revenue opportunities?

There are no simple answers to those questions, but this
year’s Viewer Watch is once again designed to help readers
better understand the issues with data and analysis.

Much of the focus is on the future, with charts providing
projections for a wide variety of multichannel, ondemand
and digital services and two stories looking at the
big trends facing the industry in 2012 and beyond.
But this report is also designed to provide readers a
sense of where the industry is today, with data on penetration
for a wide array of consumer electronic devices and
ratings for top ad-supported networks.

Among the research organizations that were particularly
helpful in providing data, we’d like to thank Horowitz
Associates, PricewaterhouseCoopers, Nielsen, Fox Cable
Networks, which compiled some Nielsen ratings data for
this report, and Turner Broadcasting System, which provided
some original analysis of the impact of over-the-top
video and other trends. Contributing writer George Winslow
compiled the data, conducted the interviews and
wrote the articles.

To read the full Viewer Watch 2012 report, please click here. ViewerWatch_Final

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