I D C M A R K E T S P O T L I G H T. S M B s Embrace Business Televi s i o n :

I D C M A R K E T S P O T L I G H T

S M B s E m b r a c e B u s i n e s s T e l e v i s i o n :

N e w O p t i o n s i n a V i s u a l W o r l d

December 2013

Adapted from 2012 SMB Emerging Services Survey Results: U.S. SMB Television Market by Matt Davis, IDC #236257

Sponsored by AT&T

Television (TV) has undergone a profound transformation over the past decade. Programming choices have expanded dramatically, new technologies like video on demand and DVRs have created a new way to watch programs, and video-capable mobile devices have enhanced and, in some cases, replaced the tried-and-true television. TVs themselves have become much more sophisticated with Internet connectivity now mainstream. This change has been driven largely by consumers, but IDC believes that given the increasing use of all forms of video, the importance of television in the workplace will also continue to expand. This Market Spotlight shares IDC research that explores the growth and usage of television among small businesses and advises small businesses on what they should look for when considering leveraging television in their own business.

Introduction

When small businesses assess their technology spending plans, services like broadband, software, and IT services or mobile voice and data are usually at the top of the list; for many companies not directly involved in hospitality, television is typically an afterthought. However, IDC research shows that the importance of business television services is growing in an increasingly video-centric, visually captivating business environment.

Television use at a business location is more common than most people think. According to IDC's 2013 SMB Emerging Services Survey, 57% of businesses not based in the home indicated that a television is in use at their business location (see Figure 1), and over 85% of these respondents indicated that they are actively subscribing to a pay TV service such as satellite, cable, or telco TV.

F i g u r e 1

Business Television Usage

Q. Does your company make use of one or more televisions at your business location?

Source: IDC's SMB Emerging Services Survey, 2013

Why Is Television Important to Businesses?

With nearly 60% of SMBs using television at their business location, small business owners must ask the following key questions: What am I using TV for? Is TV important to my business? Would TV make sense for my business?

SMBs use television for both internal-facing and customer-facing functions. For restaurants, bars, coffee shops, and other hospitality-oriented businesses, television is a critical component of the customer experience offered to customers as they recharge and relax. In addition, television usage is growing in two key areas: professional waiting rooms/lobbies and internally within corporate conference rooms, break rooms, and other office locations. Creating a visually oriented environment that keeps customers connected while they spend time in waiting rooms or lobbies reduces anxiety levels and conveys a message that the company understands that a customer's time is valuable, leading to a better customer experience, which potentially drives loyalty. Auto dealerships, hair salons, and other retail-oriented businesses have increasingly embraced this approach. The benefits for any business that requires a waiting period prior to service makes business television an excellent fit.

Market Trends

Once a small business decides that television makes sense for its business location, it typically has a

Yes (57%) No (43%)

of a communications bundle. Over the past five years, the "double play" consisting of a fixed voice and broadband combination was the primary small business bundle. However, IDC has seen a steady increase in the percentage of businesses including mobile and television services in their bundle. In addition, almost 40% of small businesses indicated that their ideal bundle would include television (see Figure 2).

F i g u r e 2

Preferred Bundle

Q. If you could purchase a bundle that best suited your company's communications requirements, which would be your preferred bundle?

Unweighted valid n = 510

Source: IDC's SMB Emerging Services Survey, 2013

As seen by the data examining usage of television and the desire of many small businesses to have TV included in a comprehensive communications package, it is clear that SMBs view business television as an increasingly important piece of their technology and communications business strategy. This connection between television and a full-featured communications package is illustrated in Figure 3, which highlights the importance of television in respondents' choice of a voice/data communications provider.

10 12 17 18 21 23 0 5 10 15 20 25

None — no conceivable bundle would interest my company

Television, broadband, and f ixed voice Broadband, f ixed voice, and mobile phone Other bundles Broadband and f ixed voice Television, broadband, f ixed voice, and

mobile phone

F i g u r e 3

Importance of Television W hen Choosing a Voice/Data Communications Provider

Q. On a scale of 1 to 5 with 1 being unimportant and 5 being extremely important, how important was the availability of television services to your choice of a voice/data communications provider?

Unweighted valid n = 291

Source: IDC's SMB Emerging Services Survey, 2013

Over 50% of small businesses indicated that the inclusion of television was either important or extremely important in their decision-making process. IDC believes that this trend will continue to grow and that television will increasingly be considered part of a comprehensive communications and technology productivity package that ultimately includes fixed and mobile voice and broadband services, collaboration tools, and other IT services.

Challenges and Considerations

Once a small business decides that television makes sense for its business, it typically has a choice of multiple sources that can provide service: cable operators, satellite operators, and communication providers. These services are offered over different technologies, and each has pros and cons. Sorting out different pricing and service packages can be challenging. Small business owners should seek out companies that will work with them in a solutions-based way.

Conclusion

also pushing into many other technology areas that service small businesses, and television is a part of this strategy. A new market entrant will often provide incentives and promotions that can make a real difference to monthly costs, so small businesses should be aware of their options and keep a close eye on the bottom line.

A B O U T T H I S P U B L I C A T I O N

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