Argues that content providers need to look at ad-supported business models and begin delivering content with a universal audience in mind rather than regional.
Ovum, a consumer research firm that specializes in “advising on the commercial impact of technology and market changes in telecoms, software and IT services,” has produced a survey on illegal video downloads which concludes that despite efforts by content providers to provide “catch-up and archive TV services” many still flock to P2P networks and services to download video content illegally.
According to Ovum’s Video Trends Survey, only one in three broadband consumers who also have digital TV say that illegitimate downloading is wrong and they would never watch a video illegally. Almost one-third admit to watching illegally downloaded content, although the majority of these (25% of the total sample) acknowledge that it’s wrong. While only a very small minority (4% overall) download illegally on a regular basis, a significant proportion (15% on average, but ranging from 8% to 26% in different countries) believe it’s not so wrong.
Adding these to the quarter of respondents who are ‘not sure’ whether or not illegal video downloading is wrong indicates that, besides those who admit to such activity, a further two in five remain unconvinced by the moral arguments against it. These findings represent a major concern for broadband network operators and service providers, as well as content owners. Consumers know that they can get good content online for free, and it’s going to be hard for any content owner or ISP to overcome the widely held perception that video on the Internet is there for the taking.
Ovum’s research reveals that the availability of legitimately distributed blockbuster movies or archive TV series, or improvements to the viewing experience such as higher picture resolution or the removal of buffering delays, will only persuade a minority of users to actually pay for online video. While lower prices for licensed content will draw in some of the more reticent and cost-sensitive consumers, a far larger number remain resistant to paying for any kind of Internet video. Even with a digital pay-TV subscription, an HD-ready set and an ever-increasing range of legitimate catch-up TV options, many consumers who can afford to pay for premium content simply don’t want to.
As free, legitimate video content on the Internet continues to proliferate in the form of catch-up and archive TV services, it might be reasonable to expect a decline in illegal consumption via peer-to-peer (P2P) networks. This doesn’t appear to be the case. Consumers seem to want it all – and without paying, if possible. For most users, the availability of free content remains the biggest attraction of Internet video, with quality of experience taking secondary importance.
The music industry has proven that suing individual file-sharers has little or no effect on illegal P2P activity and ISPs have failed to successfully implement bandwidth throttling or fair usage policies that can curb excessive network usage. At best, legal action temporarily removed a handful of isolated threats to their business, while competition is forcing service providers to increase rather than limit bandwidth to the home. But there are alternative solutions, most notably the free-to-view advertising-supported business model that looks set to prevail over the emerging Internet TV landscape.
Ovum argues that since you can’t stop consumers from downloading video content illegally content providers must think outside the box and look at free-to-view, ad-supported business models.
It also argues that content providers must rethink the outmoded release-window system. Audiences in other parts of the world aren’t going to wait until a traditional broadcast reaches their shores if they could easily get it online and for free (remember the UK’s Battlestar Galactica fiasco?). Viewers simply don’t want to – and don’t have to – wait months to see the latest blockbuster or the new season of their favorite show that’s already been aired elsewhere.
Unsurprisingly, the study concludes that when it comes down to it, many file-sharers would pay for content if they were able to receive what they wanted when they wanted.
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