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| Consumers’ use of Digital TV - Summary of Oftel Residential Survey | |
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Q1 July 2000 4. What do consumers use digital tv for? 5. Satisfaction with digital tv, and interest in future services 1.1 This report provides an overview of the key findings in the digital TV market, taken from Oftel’s residential consumer survey – quarter 1 2000/01. 1.2 It establishes baseline figures on which subsequent quarterly results can be compared to provide trend information, and examines differences between consumers with different social characteristics. 1.3 The survey was conducted for Oftel by MORI, amongst 2070 UK adults during May 2000, of whom (19%) claim to have digital TV at home. A follow up survey was conducted amongst 250 digital TV homes during July examining their usage in more detail. The results of both surveys are discussed in this report. 1.4 The report covers:
(Footnote 1) The May survey was conducted amongst a representative sample of UK adults, reflecting the UK profile of sex, age, social grade, region and employment status. The July survey was conducted amongst a representative profile of digital TV users. Because the surveys were conducted amongst a sample of adults, rather than the whole population, the data may be subject to a small margin of error. The error margin for the July survey of 250 consumers is about 4-6%, but is higher amongst smaller subgroups. (Back) Unless shown otherwise in the chart, charts exclude consumers who have said 'don't know'.
Uptake of digital TV 2.1 Since its launch towards the end of 1998, uptake of digital TV has been quite rapid and is currently used in 1 in 5 UK homes. About 2 in 3 of these homes previously subscribed to ordinary (analogue) satellite or cable pay TV services, and the remaining third are new to pay TV. 2.2 Currently, customers are adopting this new technology for mostly traditional reasons such as the wider choice of channels and programmes, rather than for the additional services available such as interactive facilities. This may however reflect the lack of widespread familiarity with these additional services and their relatively early stage of development. 2.3 Digital TV usage is not yet evenly spread across all groups of the population. Usage is more common amongst the higher income groups, and is lowest amongst older consumers, DE social grades and lower income groups. Use of interactive facilities 2.4 Over 3 in 4 homes subscribe to additional channel packages, 60% claim to have interactive services such as home shopping, and 34% claim to have email and Internet facilities. 2.5 Usage of these interactive facilities is relatively low however, with fewer than 1 in 5 customers claiming to make use of each of them. On-line gaming facilities were more popular, particularly amongst younger consumers and homes with children. 2.6 No significant barriers to use of interactive services were identified for the majority of consumers. The vast majority of those using the services rated them as ‘good’ on a number of measures including ease, speed and security of use, and the range of services available. General lack of interest, or preference for using the Internet for these activities, were the main reasons for not using digital TV interactive services. However, just over 2 in 5 non-users thought they would be likely to use shopping services in the future. Satisfaction with existing service and interest in future services 2.7 The vast majority of customers (83%) were satisfied with their digital TV service, saying it was as good, if not better than expected. Reasons for dissatisfaction included disappointment with the range of programmes, the sound or picture quality, and problems with installation or technical problems. 2.8 Electronic programme guides were popular, used by 3 in 4 homes, and almost half claimed to have used the ‘favourites’ function, enabling them to customise listings of their favourite programmes. 2.9 Interest in future products such as a ‘further information’ facility, video on demand, and digital-ready TV sets was quite high, with more than 3 in 5 digital TV homes saying they would be likely to use these. 3.1 By May 2000, almost 1 in 5 UK homes (19%) claimed to have digital TV. This equates to just over 4.5 million homes, which is broadly in line with industry published subscriber numbers. 3.2 Growth in this market has been quite significant since its launch in October 1998. This can be seen in figure 3a. The rapid uptake towards the end of 1999 would appear to coincide with free set top box offers which began in summer of that year.
Who is using digital TV? 3.3 Figure 3b shows penetration of digital TV amongst UK consumers. It indicates that usage is highest amongst the high income groups (annual household incomes of more than £30k) of whom 31% have digital TV. It was more popular amongst younger consumers than older, and less popular than average amongst the DE social grades/low income groups and smaller households. 3.4 Regionally, digital TV appeared to be most popular in Wales, where twice as many homes used it compared with London and the Midlands where it was least popular. It was also popular in homes with other technologies, such as Internet access, 28% of whom claimed to also have digital TV, and mobile phone users.
3.5 Although usage is not widespread across all groups of the population, initial rates of uptake of digital TV look good. It is important to understand however, whether this growth is comprised of consumers who are new to pay TV services, or whether it is primarily existing analogue cable and satellite pay TV customers who are switching over to digital services. 3.6 It is important to know this because of the implications the two different scenarios might be expected to have to the growth of this market. If the current uptake of digital TV is comprised mainly new users, there seems little reason why we could not expect this growth to continue. If on the other hand, uptake is comprised mainly of existing pay TV customers switching from analogue services, we might expect to see the rapid growth subside once the majority have switched to digital. 3.7 Almost 2 in 3 digital TV homes (63%) previously subscribed to cable or satellite pay TV services. The remaining 1 in 3 homes claim to be new to pay TV services. These ‘new’ customers were slightly lower income groups. Reasons for digital preference rather than analogue pay TV 3.8 New-to-pay TV customers were asked why they decided to get digital TV rather than ‘ordinary/non digital’ (analogue) satellite or cable TV. Previous satellite/cable pay TV customers were asked why they decided to switch to digital services. The reasons they gave can be seen in figure 3c. 3.9 The main reason both groups of customers choose digital over analogue TV services (mentioned by just over 1 in 3 digital homes) was they felt digital offered them more, and a wider range, of channels. Free set top box offers encouraged 1 in 4 users to take digital services, and a similar proportion of analogue pay TV subscribers moved to digital for enhanced sound and picture quality. 3.10 Overall, about 1 in 20 digital TV customers claim to have already bought a digital-ready TV. This figure is slightly higher than industry sales figure estimates which might be a result of consumer confusion as to what constitutes a digital-ready TV. 3.11 Currently, consumers appear to have traditional reasons for adopting this new digital technology - the extra channels, rather than the interactive services or enhanced quality picture/sound, appear to be driving uptake.
Consumers’ use of digital TV providers 3.12 Figure 3d shows the proportion of consumers in the survey using each of the three main digital TV providers. Skydigital accounts for the majority share of the market. These figures are broadly in line with latest industry-published subscriber figures, which estimate Skydigital 80%, ONdigital 16%, cable 4%. This comparison confirms that the survey is reflective of the current digital TV market in terms of the proportion of consumers using each provider.
3.13 3% of digital TV users claim to have already switched provider (all to Skydigital, from either ONdigital or cable presumably). Technical problems with the previous supplier, including dissatisfaction with picture and sound quality, and poor levels of customer service were the main reasons for switching. Better range of channels and services, and better value for money were other reasons mentioned by this small number of customers for switching supplier. (Footnote 2) Figure 3b shows the proportion of each group of consumers with digital TV eg 22% of men have digital TV, 17% of women have digital TV etc. (Back) (Footnote 3) A small proportion may not actually be pay TV subscribers, watching the free to view channels only. (Back)
4. What do consumers use digital tv for? 4.1 Over 3 in 4 (77%) digital TV homes claim to subscribe to additional channel packages such as sports and movies (figure 4a). This was slightly higher amongst younger consumers, higher income groups and larger households. 4.2 60% of digital TV consumers claimed to have interactive services such as home shopping, banking, or information services, while 34% claimed to have email and Internet facilities. Again these were both more popular amongst younger than other consumer groups. 4.3 15% of homes with digital TV said they watch only the free-to-view channels and do not subscribe to additional packages. This appears high compared with industry estimates of the number of non-subscribing digital users. This could include consumers who have bought a digital TV or set top box through which they can receive the free to air channels without subscribing to pay TV packages. It might also include customers who pay for a basic package eg from their cable operator, which offers only the free to view channels. It is also likely that consumers’ perceptions of what constitutes ‘free’ channels differ and may include a range of packages which offer non-premium channels. These issues shall be investigated in subsequent surveys in an attempt to establish the proportion of consumers subscribing to ‘premium’ versus other ‘basic/primary’ channel packages.
Which digital services do consumers use? 4.4 Figure 4b shows the proportion of consumers with digital TV using the various interactive guides and services available. 4.5 Electronic programme guides (EPGs) were the most popular digital service, used by 3 in 4 digital homes. Almost half were using the ‘favourites’ function on the EPGs, enabling them to produce a customised listing of their favourite programmes. It was slightly more popular amongst the higher income groups and homes with children. 4.6 Despite 1 in 3 homes claiming to have Internet or email, and almost double this number claiming to have interactive services eg shopping and banking, fewer than 1 in 5 were making use of these facilities. 4.7 This may be in part due to the current lack of widespread availability of, and familiarity with, some of these services. In addition, over a third of digital customers also have PC Internet access at home, where they can conduct a wider range of on-line activities at present. Again it was younger consumers and the higher income groups making most use of on-line shopping services. 4.8 As consumers become more educated about the range of services available and their potential benefits, usage may well increase. Some consumers are already making good use of the services available and commented on the benefits "my husband is disabled and for him it has made a huge difference the extra services they offer like shopping, the interactivity, and also the variety of programmes". 4.9 Downloading and playing games was the most popular ‘on-line’ activity, with 44% of digital consumers claiming to use this service. It was predictably more popular amongst younger consumers and homes with children, but also amongst the DE social grades.
What do consumers think of the interactive services? 4.10 Of the small proportion of consumers using email and Internet, over half claimed to use it at least once a week. On-line shopping and banking activity was less frequent than this, with 1 in 3 using more than once a month, and the majority using less frequently than this. 4.11 Satisfaction with the interactive services was high amongst those using these facilities (shopping, banking, email, Internet). Over 4 in 5 said that speed, ease of use, range of functions, and security of transactions was ‘good’ (figure 4c).
Why are the majority of consumers not using interactive services? 4.12 Reasons why the majority of digital homes are not currently using these interactive services (shopping, banking, email, Internet) are shown in figure 4d. No significant barriers to use of interactive services were identified for the majority of consumers. 4.13 Lack of interest in these services either generally, or specifically via digital TV technology, was the main reason for not using the on-line services. This may partly reflect the early development stage of these services, and consumers’ lack of familiarity with them, in addition to the current profile of digital users who, as mentioned previously, are more likely than average to have PC Internet through which they can conduct these on-line activities. Older consumers (aged 55+) were most likely to say the services didn’t appeal to them. 4.14 Potential barriers for a small proportion of consumers included difficulties in understanding/using the technology, cost issues, and concerns about security.
Future use of interactive digital services 4.15 Given that the majority of current users rated the interactive services as ‘good’ on a range of measures, and no significant barriers to usage were identified, it will be interesting to monitor growth in usage of these services as their availability becomes more widespread and consumers become more familiar with the facilities available. 4.16 Potential consumer interest in using these services is illustrated in figure 4e. On-line shopping was of most interest, with just over 2 in 5 current non-users saying they would be likely to use this digital TV facility in the future. Education activities such as on-line tutoring, revision notes and discussion rooms were also popular, particularly amongst younger consumers and homes with children. 4.17 Fewer than 1 in 3 consumers said they would be likely to use Internet or email via their digital TV, and was lower still amongst homes with PC Internet. Only 15% of homes with both PC Internet access and digital TV thought that Internet via their TV was likely to replace their ordinary home Internet service in the future. (There was no difference between heavy and light Internet users, or by the length of time consumers have had home Internet access). This again might reflect the lack of availability of these facilities currently, and their early stages of development.
(Footnote 4) This is not necessarily full Internet access as offered via a PC. (Back)
5. Satisfaction with digital tv, and interest in future services How satisfied are consumers with their digital TV services? 5.1 The majority of consumers (83%) said they digital TV service was as good, if not better, than they’d expected. This can be seen in figure 5a. 5.2 The range of programmes, sound/picture quality, and value for money were the main reasons it was considered better than expected. Ease of use and navigation was also a contributory factor. 5.3 DE social grades, the lower income groups, and younger consumers were less satisfied with their digital service than their peers. On the whole, their reasons for dissatisfaction were similar to those who thought the service was better than expected, including range of programmes, sound/picture quality, in addition to installation or technical problems.
Interest in future digital TV services 5.4 Digital TV users were asked how interested they would be in using future services and products including:
5.5 Interest in these ‘future’ services was quite high, with well over half of digital TV customers saying they would be likely to use them (figure 5b). The ‘further information facility’ was most popular with 79% of customers expressing interest in using it, followed by 71% for video on demand. Younger customers expressed greater interest in these services than their older peers. 5.6 64% of digital customers thought they would be likely to replace their set top box and existing TV with a digital TV in future.
What else do consumers want from their digital TV service? 5.7 Digital TV customers were asked what other services or facilities they would like digital TV to offer. The vast majority (71%) couldn’t think of anything specific or didn’t want anything extra. Again this might be a reflection of the relatively early stages of development of digital TV services and consumers’ lack of familiarity with them. 5.8 Of those who did think of specific services and facilities they’d like digital TV to offer, most related to the content and scheduling of programmes including wider variety and fewer repeats, and cheaper prices for additional channels and packages. 5.9 More regional information was mentioned: "local advertising – to see what was on at the local pictures, what discos were on, what groups were coming" "more regional programmes catered for Ireland" "more information on local services" 5.10 Other suggestions included: "a service where you can watch the games of the football team you like" "would like to see [certificate] eighteen films during the day, instead of at ten [o’clock] at night" "would like to see programmes turn up on time, not fifteen minutes later" 5.11 The ability to record a programme different to the one being watched was mentioned by a couple of consumers. The ability to block eg certificate 18 films or adult sites via a pin number so that children were unable to access them was another suggestion.
Can the rapid uptake of digital TV be expected to continue? 6.1 Current digital growth would not appear to be driven solely by existing analogue pay TV subscribers switching to digital services. About 1 in 3 digital customers claim to be new to pay TV services. On this basis, we would expect uptake of digital to continue, particularly if more consumers continue to move to digital-ready TV sets. 6.2 Although interactive services are not currently driving uptake of digital TV for the majority of customers, as these services and Internet facilities become more sophisticated this may encourage a greater number of homes without the Internet to adopt digital TV. 6.3 In addition, the vast majority of customers were satisfied with their digital service, claiming it was as good, if not better than they had expected. If this high level of satisfaction continues, we would not expect to see a high number of customers cancelling their digital services. Are consumers really interested in the interactive services? 6.4 Despite 3 in 5 digital homes claiming to have interactive facilities such as on-line shopping, banking or information services, fewer than 1 in 5 claimed to use these services. The majority of those who did, rated the services ‘good’ on ease and speed of use, security of transactions and range of facilities available. This indicates that these services appear to be successful where they are available and being used. 6.5 If this is the case, then why are more consumers not using the interactive services. Education and perhaps consumer confidence would appear to be the main issues here. Lack of interest in the services was the main reason for not using them, however, well over half of non-users thought they would be likely to use them in future. As consumers become more familiar with the range of services available and their potential uses and benefits, and as the services themselves become more sophisticated, we would expect usage to increase.
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