Smart TVs raise piracy and privacy concerns

Findings from Hub Entertainment Research’s new study, Privacy + Piracy, highlight US consumers’ concerns about these two issues.

Privacy:

Consumers Are Not as Excited as the Industry about Addressable Advertising on Smart TVs, But are Leaving Their Data Vaults “Ajar”

This reticence may hamper the wider rollout of addressable advertising on Smart TVs. But there may be a silver lining to the dark cloud.

With respect to Smart TVs and advertising:

• Overall, almost nine in ten (87 per cent) consumers have concerns about how their personal data is collected, used, and protected.
• In terms of Smart TVs, most (71 per cent) consumers are aware that those sets can track viewing data. A majority also say they are “somewhat” (31 per cent) or “very” (30 per cent) uncomfortable with the idea of Smart TVs collecting data about their viewing.
• Consumers are also resistant to ad agencies’ access to their viewing behaviours, with 66 per cent being somewhat or very uncomfortable about ad agencies collecting and using data about them.
• And, only 12 per cent of consumers believe using collected personal data to make ads more relevant benefits consumers “a lot” – although many (45 per cent) believe consumers benefit “somewhat”.

Despite these negative general sentiments, the survey does show there is some openness among consumers to share certain data. For instance, a majority are somewhat or completely willing to share data on each of the following:

• gender (68 per cent),
• ethnicity/race (65 per cent),
• age (62 per cent),
• sexual orientation (61 per cent),
• zip code (55 per cent),
• TV channels watched (54 per cent),
• specific programmes watched (53 per cent), or
• what they buy at the supermarket (50 per cent).

Fewer than half of consumers are willing to share information such as their name, address, income, online purchases, use of specific apps or websites, online search requests, smart home data, and smartphone location.

“Addressable ads on Smart TVs are often discussed in the context of the importance to the industry rather than to the consumer,” said David Tice, senior consultant to Hub and co-author of the study. “This study shows consumers having serious reservations about the ways data are collected, used, and protected. However, consumers’ willingness to still share many relevant datapoints, despite their misgivings, means a concerted effort to educate consumers about the benefits of data collection and use should have a positive impact for the ad industry.”

Piracy:

Even Dedicated Video Pirates Say They’re Willing to Use Legal Means of Procuring Content

Reasons frequently given for piracy are convenience (people not wanting to, or not able to go to the movies) and access (content is too expensive, or foreign content not available in the US). And even frequent pirates claim they’d be willing to use legal means of viewing – if the reasons they pirate video are addressed.

Key findings about video piracy:

• Overall, almost two in five (38 per cent) consumers are video pirates – 35 per cent admit to it, with 3 per cent who don’t admit to it but say they use pirate sites or apps. One in four (24 per cent) consumers are “active pirates” who have done so in the past six months.
• Among “active” pirates, two in three (65 per cent) say they have considered the financial impact of piracy on people or companies involved in film/TV production and distribution, but this has had little impact on their behaviour.
• About half (52 per cent) of active pirates had received a warning letter or email about their video piracy. However, less than half (45 per cent) of those who got a warning said it made them pirate less or stop altogether.
• About one in three (35 per cent) consumers share a password with a person outside their home for a digital media service (streaming video, streaming audio, digital books, or digital magazines/newspapers); and two in five (39 per cent) use a password from a person outside their household.
• A surprisingly large majority (94 per cent) of active pirates say they would use a legal means of viewing even if it cost more than piracy (42 per cent), or as long as it cost no more or less than piracy (52 per cent). A high proportion is found even among the most likely to pirate. Convenience and ability to access content are important reasons for pirating as well as cost.

“Video piracy is concentrated among a minority of the population, and driven by certain demographic groups such as those under 35, those in lower income homes, or those in homes with kids,” said Tice. “Much as we saw in the early 2000s with Napster and illegal music downloads, legal threats are less effective as a deterrent than offering pirates a legal alternative – but an alternative must address the reasons for their piracy in the first place.”