April 16, 2012
Traditional Broadcasters Continue to Battle New Players as Video over the Internet Market Matures, Accenture Survey Finds
Consumers are willing to pay for high-quality video experience tailored to different screens and with minimal advertising
NEW YORK; April 16, 2012 – A growing appetite for video content over the Internet has attracted a host of new digital services, devices and brands to the market, according to a new study by Accenture (NYSE: ACN). 
The multi-nation study, Accenture’s Video-Over-Internet Consumer Survey 2012, found that nearly two-thirds (64 percent) of those surveyed use international online providers (such as Netflix or YouTube) for viewing video content over the Internet on their televisions, PCs, smartphones and other mobile devices. However, a healthy percentage (36 percent) of respondents indicated they continue to use traditional local broadcasters and video website providers.
Battle of the brands
While younger viewers are turning to new provider brands in greater numbers, a significant number of consumers continue to trust traditional brands. Asked to name their preferred provider of video over the Internet services, respondents ranked telecommunications and broadband providers first at 43 percent. Traditional TV broadcasters ranked second (33 percent), with TV and gaming console manufacturers and new Internet companies tied for third at 12 percent apiece. Not too surprisingly, gaming console manufacturers received the highest ranking from the younger (18 – 24 year-olds) demographic.
“The survey results suggest that, given their control of networks and access gateways, telcos and cable providers today have the edge in terms of acting as a trusted provider for consumer Internet video services,” said Francesco Venturini, Accenture’s global broadcast lead. “However, established broadcasters are fighting back to earn consumer trust in the online world.
“They are investing heavily in this space to provide new services across multiple devices, showing that they are not prepared to relinquish their control of the content value chain. And with the arrival of new players such as device manufacturers and Internet businesses, the competition for digital consumers’ hearts and minds has truly started.”
Willingness to Pay
More than two-thirds (69 percent) of those surveyed said they are prepared to pay a subscription fee to watch video content over the Internet, with 43 percent already paying for some of the content they access. About half (49 percent) indicated they would pay $5 - $10 per month, and one in ten (10 percent) would pay a monthly fee of more than $10. The remaining respondents (41 percent) indicated they might be willing to pay a fee of less than $5. The caveats are that the content must be of high quality and commercial advertising must be minimal.
The frustration with advertising was especially prominent among the youngest demographic (those between 18 and 24 years of age), with 65 percent of them citing it. This is significant because 79 percent of this age group expressed a willingness to pay for content, the highest rate of any age group.
One screen does not fit all
Some significant trends have emerged as video over the Internet matures as a platform. Those surveyed had very specific viewing preferences, linking particular devices with specific forms of content. When it comes to viewing high-quality video, at longer lengths, screen size matters.
For watching full-length videos and TV series, 72 percent of those surveyed preferred the television set. The PC/laptop (41 percent) came in second, followed by tablets (25 percent) and smartphones (12 percent). For viewing live content – such as sports, news and TV programs – the device choices followed in the same order: TV set (50 percent), PC/laptop (37 percent), tablet (25 percent) and smartphone (20 percent).
But the survey also reveals a lack of consumer awareness of options for viewing Internet-based video content on the television. While more than a third (36 percent) of those surveyed chose a connected television as their preferred device, the second- largest group (23 percent) of respondents was unsure of the choices, indicating that the market remains open to new, compelling propositions. 
Accenture conducted an online survey between February 24 and March 2, 2012, with more than 7,500 consumers in eight countries: Argentina, Brazil, France, Germany, Italy, Spain, the U.K. and the U.S. The sample is representative of the national population in each country.
About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 246,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$25.5 billion for the fiscal year ended Aug. 31, 2011. Its home page is www.accenture.com.
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Gary Morgenstern
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Jessica Bardoulas
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