TV viewing reigns despite recession, Deloitte says

Despite the fear of video cord-cutting, the television set survived — even thrived — in 2009 as the economic recession took its toll. The worse the economy got this year, the more consumers turned to in-home entertainment, according to Deloitte’s fourth-edition "State of the Media Democracy" survey.

According to the survey, more than 70% of US consumers ranked watching TV in their top three favorite media activities, outpacing Web surfing, listening to music or reading and growing 26% from last year. The Internet came in second at 14%, more than double the percent selecting it last year. So while consumers’ migration to the Internet is a real phenomenon — 10% of survey respondents said they use the Internet to watch TV, it is not coming at the expense of good-old-fashioned TV viewing, according to Deloitte’s director of insights and innovation Ed Moran. Nearly 86% of the survey respondents indicated they prefer watching programming on their TV set, either live, via the DVR or on-demand.

"Our data is pretty clear that people still love the TV, and they spend an incredible amount of time in front of the TV set," Moran said. "The death of TV has been greatly exaggerated." This is especially true amongst the millennial generation, those consumers age 14 to 26. They are watching nearly 15 hours of TV per week, up from 10.5 hours last year. Overall, consumers are watching close to 18 hours of programming on their home TV in a typical week, up from 16 hours last year.

Moran doesn’t expect consumers to leave the living room anytime soon, either. As 3D technology becomes more popular and more TVs have Internet connectivity embedded, the TV will only become more central, he said. The majority of survey respondents said they would like to be able to easily connect their home TV to the Internet to view videos or download content.

GAME CONSOLES, MOBILE PHONES CHANGE DISTRIBUTION

Yet, while TV viewing isn’t going anywhere, it could take on new forms. This is being driven in part by the rise of gaming consoles as a way to bring over-the-top content to the TV. Nearly 60% of US homes own a gaming console, most of which include broadband connections. An increasing number of consumers are using these consoles to bring their favorite programming to the TV, and while Moran doesn’t believe this will replace traditional cable packages, as some have suggested, anytime soon, it is a trend pay TV providers and content providers can’t afford to ignore.

"You have this alternative distribution platform that is quickly growing — in a recession, so you know it’s got legs," Moran said. "It’s not an anomaly. People are spending a lot of money buying these consoles that are very powerful, and they are spending a lot of time in front of them playing games. We have a lot of data on the uptick in gaming across all devices, so you’d be well advised to pay attention to forging the right partnerships."

At the same time, the mobile phone — while not yet a popular vehicle for mobile TV — is increasing in popularity as an entertainment device. Deloitte found that one-third of consumers use the mobile phone for entertainment and nearly half of smartphone owners consider it amongst their top three more valuable media and entertainment products. That’s up from only 20% last year.  
                                                                                                              
THE RISE OF TRIBAL MARKETING

The rise of the mobile phone as an entertainment device, coupled with the increase in data plan ownership — 48% of survey respondents have data plans — is spurring new consumer behaviors, including mobile search, social networking and purchasing. This, in turn, is spurring the need for a new kind of consumer marketing, Moran said. Deloitte found that TV ads remain the most influential media — 83% of consumers said they were amongst the top three influences of their buying decisions, but online ads had a much lower impact. Less than half identified online video, banner, search engine results ads and pop-ups in their top three most influential.

This hasn’t always been the case either — the ability of Web site ads to move traffic to other sites has dropped from 72% to 59% over Deloitte’s past three surveys. Moran said consumers are becoming wary of online ads and less inclined to click on them, even when the ads targeted. He believes that rather than implement targeted ads, where most of the focus is today, advertisers should look towards socializing their marketing schemes.

"We believe through a lot of other research and through this survey that recommendations from another human being are extraordinarily powerful," Moran said. "Even if you’ve never met them, it’s very effective at getting them to buy or not buy another product."

Right now, social aspects are being missed by marketers who are stuck in the display ad and search-engine optimization mindset, Moran said, but one-fourth of consumers would like to have an online service that recommends a product based on other consumers’ preferences. Marketers need to, first off, let consumers comment on their products, whether good or bad and, second, engage with them with real, personal feedback. Lastly, they need to correct the problems consumers complained about in the first place, he said.

"That’s tribal marketing," Moran said. "That’s leveraging the people around you. The Web has a long memory, and you don’t want to have [bad reviews] up there. Be responsive and change the product. Again, those are the companies people seem to want to do business with; not the faceless organizations that ignore them."