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Subscription video services’ recommendations aren’t working, study claims

Streaming video services invest heavily in technology to improve their ability to show users a set of personalized recommendations about what to what next. But according to a new research study released today by UserTesting, it seems that consumers aren’t watching much recommended content – in fact, only 29 percent of the study’s participants said they actually watched something the service recommended.

On some services, those figures were extremely low – for example, only 6 percent of HBO NOW users said they watched recommended content.

That’s probably because consumers found it difficult to locate HBO NOW’s recommendations in the first place. The service was given a low 16.8 “customer experience” score on this front, the study says. That’s a much lower score than all other services analyzed, including Netflix, Amazon Prime Video, Hulu and YouTube TV – all of which had scores in the 80’s. (See first chart, below).

To be fair, HBO NOW doesn’t really do recommendations in the same way as the others.

Its app offers a “Featured” selection of content for all users, and, if you scroll down further, there are a couple of editorial collections, like “Essential HBO” or “14 Hidden Gems You Missed the First Time.” A separate “Collections” section includes more of these suggestions, like “New Movies,” “Just Added,” “Last Chance” and others.

The lack of personalized, easily located recommendations also impacted HBO NOW’s overall score in the UserTesting study, which rated the services across a variety of metrics including availability of content, friction-free viewing, ease of scrubbing and episode scanning, and other factors. HBO NOW was also was dinged by survey respondents for lagging, freezing and buffering issues, though they said they appreciated its clean design.

Netflix’s overall score was 89.5, making it the highest-rated streaming service among those analyzed due to having the most relevant recommendations, overall high ease-of-use, and a speedy service. It was followed by Hulu (86.8), Amazon Prime (85), YouTube TV (80.7), and then HBO NOW (71.8).

Coincidentally, Netflix also just beat HBO in a survey related to consumer appreciation for original programming, put out by Morgan Stanley. 39 percent of respondents in that survey said Netflix had the “best original programming” compared with HBO’s second place rank of 14 percent.

UserTesting’s study also backed up earlier research from Deloitte, as it found that subscription video customers are having to subscribe to more than one service in order to find all the content they want to watch.

More than half said they subscribe to at least two apps. For example, 90 percent of HBO NOW customers also subscribed to Netflix, while 80 percent subscribed to Amazon Prime.

The study additionally found that much of viewing (45%) takes place on TV or via streaming media devices like Roku, Apple TV, or Amazon Fire TV. 37 percent preferred laptops, and 11 percent said their smartphone or tablet was their primary streaming device. For some services, TV viewing is even higher – Hulu recently said that the majority – 78 percent – takes place on TVs.

UserTesting’s study involved 500 subscription video customers, 74 percent of whom said they watched streaming media every day. The full report is available here.



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Over-the-top-only U.S. households nearly tripled since 2013, impacting TV ad dollars

The number of U.S. households using only over-the-top streaming services to access TV programming and movies has nearly tripled over the past five years, according to a new report (PDF) from the Video Advertising Bureau out today. While on its own, that figure sounds impressive, the report points out that cord cutters’ slice of the pie is still fairly small – there are 14.1 million over-the-top only households, which is just 11 percent of all U.S. TV households.

That’s less than the 12 percent of households that receive broadcasts over-the-air using a TV antenna, and far smaller than the 74 percent – or 90.3 million – multichannel households who access television through a cable, satellite or telco subscription.

In addition, the report found that over-the-top services are often being used alongside traditional pay TV subscriptions, not in place of them. In fact, 70 percent of over-the-top households also had a cable, satellite or telco TV subscription.

However, adoption of over-the-top services is growing. The VAB report forecasts that by 2021, over-the-top only households will grow 8.2 percent to 17.9 million homes, while multichannel households drop 2.4 percent.

This continued growth means these over-the-top customers may be spending less time watching traditional television going forward, too.

For starters, nearly a third of over-the-top streaming service subscribers have three or more means to access over-the-top content, which represents an eight-fold increase over just the past two years.

And 70.8 percent, or 193.3 million U.S. consumers. are today accessing an over-the-top video service at least once per month – a figure that will grow to 200 million U.S. consumers by 2021.

But the VAB report notes that streaming is still a small fraction of TV viewing hours, accounting for 11 percent of TV viewing hours from those ages 18 to 49 during October 2017. That’s up from 8 percent in 2016, and 5 percent the year prior.

Still, the shift to over-the-top streaming is starting to have an impact on the TV ad industry.

In a related report from eMarketer, also out this morning, analysts found that TV ad spending will continue to decline in 2018, following its initial drop in 2017. Specifically, TV ad spending will drop 0.5 percent in 2018 to $69.87 billion, resulting in TV’s share of total U.S. media ad expenditures dropping from 33.9 percent in 2017 to 31.6 percent this year.

Spending will perk back up in 2020 with the U.S. presidential election and summer Olympics in Tokyo, but then will fall again to reach only a quarter of total ad spend by 2022.

“The shift of audiences to [over-the-top] viewing is changing the climate of the TV ad market,” said eMarketer senior forecasting director Monica Peart, in a statement. “As ratings for TV programming continue to decline, advertiser spending will also continue to see declines, especially in years that do not boast major events such as presidential elections and Olympic games.”

As TV ad spending declines, digital ads will climb – and over-the-top platforms will play a big role here, says eMarketer.

For example, Roku’s ad revenues, which include both video and display ads, will surpass $293 million, up 93.0 percent over 2017. And Hulu’s ad revenue will grow more than 13 percent to $1.12 billion.

Emarketer’s figures on over-the-top viewers are roughly in line with the Video Advertising Board. It says the number of over-the-top viewers will grow to 198.6 million this year, versus VAB’s calculation that 193.3 million U.S. consumers now stream via an over-the-top service as least once per month.

“Over-the-top platforms are growing in number and size, and many compete directly with pay TV by offering bundles of live channels at attractive price points,” said eMarketer principal analyst Paul Verna. “Consumers who want to cut or shave the cord now have a wealth of options that didn’t exist a couple of years ago. And we expect the offerings to become even more robust as more players enter the market,” he added.


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TiVo officially announces its voice-controlled DVRs, the BOLT VOX and Mini VOX

DVR maker TiVo today officially confirmed the launch of its new DVR, the TiVo BOLT VOX, and its smaller counterpart, the TiVo Mini Vox, following yesterday’s leak. As had been reported, the biggest change is that these are the first TiVo DVRs to include a voice remote control, which allows users to search across live TV, DVR, video-on-demand and online streaming services just by speaking.

These voice searches will also return personalized recommendations based on users’ viewing habits, the company says.

Additionally, the voice remote goes a step further than some rivals’ products, as it lets TiVo owners refine their queries on the fly.

For example, you could say “show me the movies with Tom Cruise,” then refine the query by saying “only the comedies,” or “the one where he says ‘show me the money,’” explains TiVo.

What’s more is that some current TiVo owners won’t have to buy a new DVR to gain voice control features. The TiVo VOX Remote will be sold separately for $39.99, allowing existing BOLT, Roamio, and first-gen TiVo Mini customers to upgrade to voice control. The remote will be available in both black and white, so it can match the DVR customers already have. (The new BOLT VOX and Mini VOX come in black.)

The remote has been redesigned a bit from previous versions, as we noted yesterday. It now has a big blue voice button near the top, and overall, a more organized layout, plus a dedicated commercial skipping button and one for Netflix.

The BOLT VOX DVR will join the BOLT family of DVRs – TiVo’s newer devices, aimed at helping users bridge the world between online services and traditional TV.

Like the original BOLT, select BOLT VOX models let viewers watch and record from either digital cable or over-the-air TV via a digital antenna, and search for programs across TV, video-on-demand and online streaming services like Netflix, Hulu, Amazon Prime Video and others.

The devices also support 4K Ultra HD which can be expanded to other rooms in the home with the addition of the TiVo Mini VOX.

Also as reported, the BOLT VOX will come in three sizes: a 500GB model (for up to 75 HD hours of storage space) and a 1TB model (150 HD hours), each with 4 tuners; and a 3TB model with 6 tuners which can record up to 450 HD hours. However, the latter model only supports recording from digital cable, not over-the-air. The devices start at $199.99, while the Mini is $179.99.

The DVRs will ship will TiVo’s new user experience, as well, which focuses on personalized recommendations and more visual elements, like poster art, actor and director bios, and team sports logos, to help users find what they’re looking for more quickly.

It also introduces a new QuickView feature that allows viewers to see shows playing on different tuners, favorite channels, a one-line channel guide, and TiVo’s SmartBar – a new feature that displays predictions of shows based on users’ past viewing behavior.

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Like prior products, the DVRs will also let you skip the commercials with a touch of a button; speed watch shows at faster-than-normal speed via QuickMode; and watch across web and mobile devices in and out of the home, using TiVo’s apps.

The new VOX products will go on sale at the end of the month, October 29, 2017, through, Amazon, and in Best Buy retail stores.

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Free streaming TV service Pluto TV raises $8.3M, in new round led by Samsung

Free streaming TV service Pluto TV announced today it has received a new $5 million investment from Samsung Venture Investment Corporation, the VC arm of the Samsung Group. Combined with other investors, the full round totaled $8.3 million, the company says.

Pluto TV declined to disclose the other investors in the round, but said they’re a mix of both new and prior investors.

The round follows a $30 million Series B for the streaming service, announced a year ago, which valued the business at $140 million. Investors then included ProSieben of Germany and Scripps Network Interactive, among others. While that round was more focused on helping fuel Pluto TV’s expansion into the European market, the funds from Samsung could be viewed as more of a strategic investment from a partner. (Pluto TV already streams its content on Samsung Smart TVs.)

However, the two companies are not yet sharing what sort of plans they may have for future integrations.

Pluto TV’s service itself offers over 100 free live channels and on-demand programming. Today, it has partnerships with TV networks, movies studios, publishers, and digital media companies. And it has been rapidly making new deals for content in recent months.

This year alone, for example, Pluto TV announced over 40 partnership deals with  Warner Bros, Lionsgate, Metro-Goldwyn-Mayer (MGM), Bloomberg, Al Jazeera English, Cheddar, Gravitas Ventures, Asylum, Viz Media, Electronic Music Awards, Big Sky Conference, Stadium, Jukin Media, and JASH.

Pluto TV is available online, on mobile devices, and on media players and other living room devices including Samsung Smart TVs, Roku, Apple TV, and game consoles like Playstation and Xbox. Its service reaches 6 million active viewers per month, and generates review through advertising.

“Samsung is the global leader in the TV market, changing the way people experience entertainment through constant innovation,” said Tom Ryan, CEO of Pluto TV, in a statement about the new funding. “Their investment in Pluto TV is a great vote of confidence in our mission to bring free Internet television to consumers everywhere.”

“Pluto TV is the leading free Internet TV service in America and we see huge potential for the company as they scale their cutting edge offering to viewers around the world,” said Jihong Kim with Samsung Venture Investment Corporation, also in a statement.

To date, L.A.-headquartered Pluto TV has raised $51.8 million from investors including USVP, ProSiebenSat.1 Media, Scripps Networks Interactive, Sky, United Talent Agency, Luminari Capital, Chicago Ventures, Pritzker Group and others.

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