A new study from GfK highlighted some sharp differences between the tightly controlled world of Pay-TV and the laissez faire Internet approach. The GfK report said that pay-TV homes preferred to use free services from TV networks over the authenticated TV-Everywhere services from their pay-TV provider. According to the research 64% of pay-TV subscribers were aware of free TVE services from networks and 37% had used them versus 52% aware of pay-TV TVE services and 30% used them.
This sounds counter-intuitive since there is typically a far broader range of content available from the Pay-TV TVE service. One reason GfK gives for this sharp difference is the necessity to login – or authenticate – to the Pay-TV service. Apparently, 70% said they would be at least somewhat deterred from using the service if they had to authenticate and 25% said they would be deterred a lot. Again, this seems odd since the participants in the study were all Pay-TV subscribers and, presumably, were entitled to access the Pay-TV authenticated services as part of their subscription.
Upon reading this, what immediately came to my mind was something Chet Kanojia, the CEO of Aereo, said to me when I interviewed him at last November’s Videoschmooze in New York. He talked about how the web way of doing things gave the power to the consumer to choose from an array of services with the minimum of commitment. In that context making Aereo very easy to use and equally as easy to leave was a critical selling point for the service. That’s why a user can “subscribe” to Aereo for just one day and pay just one dollar. What could be simpler?
Others have termed this “easy in, easy out” feature of many web services the frictionless Internet. But whatever we call it, this approach to services is something totally foreign to the Pay-TV industry. There is nothing frictionless about a Pay-TV subscription. High prices, custom hardware, custom installation and extended commitments are the hallmarks of these services.
What the GfK study is highlighting is that this approach to service delivery simply doesn’t translate to the web world. Even for a Pay-TV subscriber that has the right to use an operator provided TVE service, logging in to gain access is an onerous requirement. And in the frictionless Internet, it is simply easy to move on to a free, unauthenticated service.