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June 14, 2013

US Consumers More Tolerant of Streaming Video Ads, but Premium Service Still Attracts

By Tara Seals, TMCnet Contributor

Video ads are ever more pervasive, particularly on mobile platforms (as anyone who plays Words with Friends knows). When it comes to tolerance for these, 40 percent or more of consumers across the United States, Canada and the United Kingdom say that they either don’t pay attention to ads while watching content on their personal devices, or don’t find ads irritable, according to research from QuickPlay Media. But that still leaves a majority that do, opening the door for video monetization in the form of premium services.

Viewers in the U.S. (62 percent) are actually more tolerant – or desensitized – when it comes to seeing video ads on their devices compared to Canada (40 percent) and the U.K. (49 percent). Perhaps more importantly, a fifth (20 percent) or more of consumers across all three countries are willing to pay $5-$7 per month for advertising-free access to streaming premium video content (TV shows, movies, events, etc.).

Consumers across all three geographies still feel that most mobile ads are highly irrelevant and not specific to their interests. U.S. consumers felt that only 29 percent of the ads they viewed were somewhat relevant to them, while U.K. and Canadian consumers said only 25 percent and 12 percent, respectively, were relevant.

In addition, about a quarter of smartphone and tablet users are more likely to react to a video ad on a smartphone or tablet than on television, with this share being slightly higher in the U.S. (30 percent) compared to the U.K. (25 percent) and Canada (24 percent).

Premium video content – selection of more TV channels, theatrical releases and free-from-advertising content – is a driving factor-motivating increased device usage, with 50 percent of consumers or more in each country citing a willingness to pay for each of these features.

“As more options for watching premium video content emerge for consumers, their particular preferences when it comes to multiscreen video viewing are also coming into focus,” said Wayne Purboo, president and CEO of QuickPlay Media (News - Alert). “Consumers are looking for more content; based on these results, consumer sentiments are coming through loud and clear: more and better selection of content delivered with minimal disruption. Service providers must factor in not only the right content but also ensure they have the right service platform to deliver HD quality multiscreen packages without compromising on quality of experience.”

A roughly equal number of North Americans reported using smartphones to watch video on demand (VOD) and live TV (21 and 22 percent, respectively, in the U.S., and 11 and 10 percent in Canada). In the U.K., however, only 9 percent of consumers reported watching VOD on their smartphones, while 20 percent reported watching live TV.

The story on tablets is different, with more North American consumers watching VOD (23 percent in the U.S. and 21 percent in Canada) compared to live TV (18 percent in the U.S. and 11 percent in Canada).

Among U.K. tablet viewers, approximately equal audiences watch live TV and VOD (18 percent and 15 percent, respectively).

In terms of content, about 85 percent of viewers in North America use VOD to watch TV shows and the same percentage watch movies on VOD, while U.K. viewers prefer TV shows for VOD (91 percent), versus movies (60 percent) on their devices.

Sporting events and news are the two content types that viewers prefer to watch live across all three countries. More than 80 percent of consumers prefer to watch these types of programs live. Among these respondents, over 40 percent in the U.K. and U.S. watch sporting events live on second screens (desktops, laptops, tablets and smartphones). This share was slightly lower in Canada, at just over 30 percent.

When asked about which features would increase device usage, at least two-thirds of respondents across all three countries indicated reduced costs, better programming quality and increased content choice.

Edited by Alisen Downey
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