A recent survey commissioned by Time Warner (NYSE:TWX) and conducted by Innerscope Research suggests that the new age video viewers are flipping through media at an alarmingly high rate – 27 times every hour when they are not working.  The culprit – too many options floating in the market and flooding of channels. This implies that it is imperative for content companies to create engaging and unique content and it becomes necessary for pay-TV and streaming service providers such as Comcast (NASDAQ:CMCSA), Time Warner Cable (NYSE:TWC) and Netflix (NASDAQ:NFLX) to take a step towards personalization.
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Surely if this finding is correct, it impacts the advertisers also in a big way. They’ll need to make their advertisements more targeted and convey their messages in short amount of time.
However, that may not be the end of it. Streaming and pay-TV service providers will look at ways to personalize the content so that as soon as the viewers hit play – they are looking at something that they really want to. This is one way for engaging the viewers for a longer time with a single media source or channel, and thus can help the advertisers channel their funds appropriately.
The video content is increasingly getting fragmented and number of choices act like a double edged sword. Content companies and cable providers need to figure out how to engage this new generation of fickle viewing.
Our price estimate for Time Warner stands at $40.20, implying a discount of little less than 10% to the market price.Notes:
- Study: Young Consumers Switch Media 27 Times An Hour, Advertising Age, Apr 9 2012 [↩]