Yearly Archives: 2012

Dec
12

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Mickey Mouse is a Cord-Cutter

Why pay $80 a month for cable, when you can meet Prince Charming for just $7.99? We all know that Prince Charming would not need to ask for a long term commitment, because he realizes that if it is a good relationship. You will never leave. Cable companies were hoping to make you feel like you had no choice. Well it is time to celebrate.

Comcast and Charter customers hoping to live a real-life fairy tale can give up any hopes of their Fairy Godmothers appearing on the televisions before them. In an announcement made last week, Netflix’s video subscription service outbid pay-TV giants and snagged the rights to Disney movies shortly after the films leave theaters.

Cord-cutters everywhere will have online access to Disney classics from the comfort of their own homes. Cord Cutters will be rejoicing from around the country singing, with all the money in their pockets watching free HD television and singing.  For less than the cost of an average movie ticket, entire families will be able to cheer on their favorite Disney heroes. The multiyear licensing agreement strengthens the already robust library of flicks available through Netflix.

Sorry cable companies – it’s another tough blow to your dwindling customer base. At the going rate, you won’t be living happily ever after. So what are you waiting for, cut the cord and start singing in the streets… just like in the Disney Classic, Newsies! Seize the day and save today!

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Dec
9

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Antennas Direct DB8e and ClearStream™ C1 Convertible Wind Tunnel Test

Both DB8e and C1C passed wind resistance test by wind tunnel with maximum velocity 55 m/s, which is 16th grade of Beaufort scale (even stronger than a Hurricane!

Nov
28

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Study: Cord-Cutters and Cord-Nevers Will Soar to 17.2 Million U.S. Homes by 2017

Tuesday, November 27, 2012, 10:18 AM ET

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Posted by Will Richmond

New research from The Diffusion Group forecasts that the number of “pay-TV refugees” – U.S. homes subscribing to broadband, but not to pay-TV services – will increase 58%, from 10.9 million in 2012 to 17.2 million in 2017. Pay-TV refugees consist of both “cord-cutters” (homes that once subscribed to pay-TV, but no longer do) and “cord-nevers” (homes that have never subscribed to pay-TV). The percentage of broadband subscribers who are pay-TV refugees will increase from 12.5% in 2012 to 17.2% in 2017.

Although it forecasts the number of cord-cutters to increase over the next 5 years, TDG’s founding partner and director of research Michael Greeson believes the pay-TV industry’s main concern should be with cord-nevers which will more than double during that period. Of the 17.2 million pay-TV refugees in 2017, TDG forecasts 40% or 6.9 million of them to be cord-nevers, up from 29%, or 3.2 million, in 2012.

Michael explained to me last week that, as expected, cord-nevers will be younger, have lower incomes and be more technology savvy. They are challenged by the high cost of pay-TV service, which increasingly will be seen as more of a luxury than a necessity. With the proliferation of inexpensive over-the-top choices and behaviors that lean toward video consumption on screens other than the TV, this cohort will become more prone to skipping pay-TV altogether.

Michael notes that in doing so, many younger cord-nevers will full well recognize that they’ll have an “imperfect, but sufficient substitution solution” for pay-TV. Yet for many, it won’t be much of a sacrifice given shifting viewing patterns. For instance, when cord-cutters age 18-24 were asked about their rationale for dropping pay-TV service, over 61% cited that they were watching more SVOD services like Netflix. This was the second-highest rated response after pay-TV was “too expensive and I needed to cut back,” which, together with pay-TV is a “poor value,” scored in cord-cutters’ top 3 reasons across every age group.

With the average tab for video services alone now over $80/month, affordability has emerged as a key pay-TV vulnerability. The primary culprit in driving up subscriber rates as been the surging monthly costs for programming that pay-TV operators bear. And as I’ve pointed out numerous times in the past, among the programmers, there’s no bigger cost driver than sports networks, both nationally and regionally focused.

The bad news for pay-TV’s future affordability, and one of the reasons I think TDG’s focus on cord-nevers and their price sensitivity is correct, is that TV sports rights continue to escalate dramaticaly. The latest deals by News Corp. to buy 49% of YES Network for nearly $2 billion and also likely pay $6-$7 billion for 25-year TV rights to the LA Dodgers (7 times more per season than it currently pays), plus ESPN’s $7.3 billion to lock up college football’s BCS playoffs, Sugar, Orange and Rose Bowls, are among the latest contributors to the mania around TV sports rights.

As I begain saying almost 2 years ago, and as cable TV titan John Malone said last week as well, rapidly rising sports costs are creating a massive tax on non-sports fans, creating a squeeze on them that will ultimately drive some to switch to cheaper OTT options. Pay-TV subscription rates – like trees – cannot grow to the sky, and TDG’s forecast should be yet another warning sign to the pay-TV industry that given more choices, consumers will vote with their wallets in the years to come.

TDG’s research is based on an online panel of 500 U.S. adult broadband users randomly selected from an online panel of several million consumers. The report also contains extensive demographic, psychographic and techno-graphic information and is available exclusively to TDG’s members.

Nov
26

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As pay-TV operators embrace the model, OTT comes of age.

Michelle Clancy | 17-11-2012

Over-the-top appears to be coming of age, as consumption hits critical mass, the revenue opportunity expands and the business model continues to work its way into mainstream carrier tactics.

The research into the area is coalescing: the OTT market is set to be worth $37 billion by 2017, according to new research from Informa Telecoms & Media. And that, in turn, is prompting service providers to adopt new multi-screen models to cash in on the opportunity. And not just that: Pyramid Research says that pay-TV providers absolutely must embrace it in order to retain and grow subscribers.

“The growth of OTT video services is disrupting the traditional pay-TV market and is dramatically driving traffic growth,” said Pyramid Research Analyst Daniele Tricarico, “but more consumers are watching video on multiple screens, opening up for new opportunities for pay-TV providers and telcos to implement multi-screen business models.”

And while the United States is ahead in terms of operators rolling out TV Everywhere (Informa says that the US currently accounts for over three-quarters of revenue), other regions are catching up. The US portion of OTT consumption will likely drop to less than 60% in 2017 as Europe and Asia grow more quickly, Informa noted.

One good example of an operator getting ahead of the curve is Telefónica, which has announced plans to build a new Global Video Platform (GVP) for all video entertainment services over both IPTV and OTT networks across its operating businesses.

“Video is a fast-growing market, and we already play a leading role in delivering pay-TV services to customers in Europe and Latin America,” explained Vivek Dev, director of digital services, Telefónica Digital. “This new platform allows us to reflect the deep and rapid changes happening in this market. It offers the ease and convenience of a global, convergent platform while maintaining flexibility over content for our local businesses. Most important, it allows us to meet customer demands for access to video content on an ever-expanding range of devices.”

In terms of the hybrid perks, the range of advanced features it aims to offer to TV subscribers will include time-shifting, multi-screen and multi-device capabilities across set-top boxes, Xbox 360, tablets and smartphones.

Meanwhile, in the UK TalkTalk is riding the OTT wave to a massive subscriber acquisition rate — it says that it is signing up 1,000 new customers per day in the wake of launching its OTT-based, YouView-powered TV service in September. During its interim earnings report, it said that it has now has seen a growth of 44% compared to last year.

TalkTalk has a base of four million broadband customers for whom the TalkTalk Plus package is free after payment of a £50 ($80) installation fee for the YouView STB. It offers customers a free YouView Internet TV STB, with a 12-month subscription to the popular LOVEFiLM Instant service and access to more than 100 broadcast channels, including free to air programming from the BBC, ITV and many others, as well as extra paid premium channels such as Sky Sports.

“We have successfully launched our TV proposition and have installed 29,000 customers to date,” said Dido Harding, CEO at TalkTalk.

Overall, TV Everywhere and multi-screen services that leverage OTT are helping telcos and cablecos to increase loyalty and to generate new revenue by boosting migration from lower-value packages to higher-value multiplay bundles, including high-speed Internet, which is needed for better quality video.

“All pay-TV providers also have the option to launch their own OTT-like video services and extend their reach to non-customers, thus generating additional revenue beyond the existing customer base,” Pyramid’s Tricarico added.

Nov
16

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Still Hate Your Cable Company? 292,000 Defections Show You’re Not Alone.

By Rick Aristotle Munarriz, The Motley Fool

Posted 6:00AM 11/10/12 |

One thing is becoming clear as cable companies and satellite television providers shell out their latest quarterly financials: Americans are fed up with their ever-growing bills for premium TV.

With the exception of DirecTV’s (DTV) — which gained 67,000 net subscribers during the quarter — the key players lost more video customers than they signed up.

It’s not pretty, but let’s look at the net change in U.S. residential video subscribers for the third quarter.

  • DirecTV: +67,000
  • Cablevision (CVC): -10,000
  • Dish Network (DISH): -19,000
  • Charter Communications (CHTR): -73,000
  • Comcast (CMCSA): -117,000
  • Time Warner Cable (TWC): -140,000

Source: The Wall Street Journal.

It’s grim. Add up all six players and the cable and satellite TV industries closed out the period with 292,000 fewer customers than they had just three months earlier.

Where Did Everyone Go?

AT&T (T) and Verizon (VZ) have been gaining ground with their slightly more economical U-verse and FiOS services, respectively, but that doesn’t explain the entire shortfall. Folks are either genuinely fed up with their TV bills or they just can’t pay up.

Even DirecTV is smarting. Sure, it stands out because it gained ground last quarter, but analysts were expecting net additions of 105,000 for the period. DirecTV suffered the first net decline in its history during the second quarter, and Wall Street figured that it would bounce back in a major way.

It didn’t.

Life After the Cables Are Cut

There are plenty of solutions for those ditching their pay TV plans. HD antennas are a cheap way to receive over-the-air local channels, and are growing in popularity. Beyond that, homes with Internet and WiFi can take advantage of a growing number of video services.

Cable and satellite television providers know this. They have been trying to milk more value out of their subscriptions by offering broader arrays on-demand content. The “TV Everywhere” movement — which allows cable customers to stream the channels they are already paying for through mobile apps at no additional cost — was initiated by Comcast and Time Warner Cable.

However, customers are getting antsy. They don’t appreciate having to pay a growing flat fee for one-size-fits-all baskets of programming that include more channels that they’ll never watch than channels they will.

When the pay-TV industry suffered its first quarter of net defections two years ago, some suggested that it was simply a matter of the soft economy. Now that the economy is clawing its way back, it’s clear that the industry has a bigger retention problem on its hands.

Nov
15

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Pay-TV sees more subscriber drains in Q3, opening the door for OTT.

Michelle Clancy | 12-11-2012
The North American pay-TV industry’s subscriber numbers in the third quarter continued to deliver bad news, with subscriber totals across segments missing targets.

Overall, Sanford C Bernstein’s Craig Moffett said that operators, including privately-held ones, lost a combined 127,000 subscribers in the quarter. Analysts say that the continuing softness will drive new over-the-top (OTT) offerings from traditional providers — and perhaps a satellite merger.

Here’s a quick rundown on Q3 totals for traditional cable and satellite: Cablevision lost 10,000 customers, Charter Communications lost 73,000, and Comcast lost 117,000. DISH Network lost 19,000, and DirecTV added just 67,000 new video customers — that’s 80% less than last year. Time Warner Cable, meanwhile, lost 140,000 video subscribers.

“For two years now, the pay-TV industry has grown subscribers at a rate essentially indistinguishable from zero,” Moffett said in a research note reported by the Hollywood Reporter. To wit, he noted that a first-quarter gain of 429,000 this year was promptly negated by a 410,000 drop in the second quarter and now the slightly less awful 127,000 in the third. In 2011 the pattern was the same, but with the second half of the year showing marked improvement. A first-quarter pay TV subscriber gain of 454,000 was followed by a 440,000 drop in the second quarter, a 25,000 drop in the third and a gain of 243,000 in the fourth, he said.

ISI Media analyst Vijay Jayant agrees that the sector lost subs. “The third quarter of the year is generally the rebound quarter for the [sector] after a seasonally weak second quarter,” he told THR. ” While third-quarter video subscribers did rebound, overall video net adds were tepid at 30,000 subs. We estimate that if unlisted cable companies are included, pay-TV industry lost subs.”

Of course, all segments are not suffering equally. In addition to the cable losses, gains at DirecTV offset Dish Network losses to yield net growth of 48,000 subscribers in the satellite TV sector. IPTV operators are faring marginally better than the TV incumbents: Telco Verizon Communications reported that that its FiOS TV service added 119,000 pay TV subscribers in the third quarter. That’s virtually unchanged from the 120,000 subscriber additions in the second quarter, but less than the 131,000 additions recorded in the year-ago period. As of the end of September, FiOS TV had 4.6 million subscribers, representing a year-on-year increase of 15.4%.

AT&T meanwhile added 198,000 U-verse TV subscribers in the third quarter, with revenue ticking upward 38% year-on-year (including the 613,000 additional U-verse broadband subscribers that it picked up). It now has 7.4 million U-verse TV and Internet subscribers.

Overall, the telcos signed up about 320,000 new TV subscribers in the latest quarter — less than a year previous but still far surpassing cable and satellite performance.

So is subscriber drain a serious issue? Yes and no. ABI Research estimates that the traditional TV operator business, which is worth $16.8 billion in the US, is set to decline just 0.5% per year through 2017 — hardly evidence of widespread cord-cutting. But it does show a shift in consumer trends that savvy operators will note and make plans for.

If anything, it could be an opportunity: consumers are embracing additional entertainment choices thanks to continually improved online and over-the-top (OTT) video experiences, leaving an opening for pay-TV operators to build a new business that leverages OTT components. Some are already working on this: DISH Network acquired Blockbuster to make a play at that market; Verizon will soon launch Redbox Instant with physical kiosk rental company Redbox. Meanwhile, TV Everywhere plays that leverage traditional pay-TV operators’ vastly better content vis-a-vis OTT providers can appeal to the thirst for anytime, anywhere content and sweeten the pot for consumers taking $100+ TV subscriptions.

The move to OTT also opens up a case for selling faster broadband tiers to more subscribers. AT&T, for instance, said the average U-verse home spent $170 each month on cable TV and Internet. And 54% of its U-verse Internet customers taking a plan offering speeds of 12Mpbs or higher, compared to 43% in the third quarter of 2011.

The losses, in the main, are being driven by economic woes, and therefore are being seen in lower income households. “Declining industry penetration rates suggest that cord-cutting is a reality, but perhaps not in the way that most pundits think,” Moffett wrote in his note. “Certainly, there is no evidence that customers are dropping subscriptions in droves in favour of Internet-based content. Rising costs of cable service, however, are undoubtedly becoming more burdensome for lower income households, increasing the likelihood that some households are reverting to rabbit ears – cable losses, at least, continue to be concentrated among low-end ‘broadcast basic’ subscribers.”

ABI pointed out that pay-TV operators could thus also leverage thirst for OTT to provide “entry-level” tiers of TV. “While many OTT services focus on movies, the goal of lightweight pay-TV packages should be to introduce customers to the brand and tease customers with premium content offerings,” said Sam Rosen practice director, TV and video.

In addition to OTT strategies emerging, Moffett also thinks that the poor subscriber performances will add impetus to a merger between satellite giants. “We are increasingly of the view that DirecTV and Dish Network will propose a merger over the next 12-18 months,” Moffett said. “Making the case to regulators that their long-term viability is only ensured if they merge to form one stronger entity would be a bit easier against a backdrop of subscriber weakness.”

Sep
24

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The growing popularity of Web TV

If anyone needed any convincing about the power of web TV, the recent news that YouTube now serves more search queries than the Yahoo and Live search engines has certainly emphasised the point. Moreover, this reflects the continuing dominance of Google, which owns the video streaming site.

In November, YouTube received 2.79 billion search queries, more than the 2.62 billion searches registered on Yahoo and the 1.05 billion searches on Live. In this article, we will look at research, which further illustrates the growing popularity of web TV as a platform.

Recent research by Forrester Research has shown that watching web TV is now the fourth most popular online activity, ahead of downloading music and movies. Watching online video streams was common among 54% of heavy internet users studied by Universal McCann and Insight Express.

60% of internet users have watched videos online according to the Pew Internet and American Life project. Among these, three quarters of young adult Internet users aged 18 to 29 watch online video and approximately one in three of these said they did so every day.`

It is not just the young, however, who are watching web TV. A survey by BIGresearch has revealed the shock statistic that the average age of YouTube viewers in the U.S is 39. Similarly, data compiled by Nielsen/NetRatings, comScore and Quantcast revealed that those aged 35-64 constitute between 48% and 65% of audience figures for online TV.

Clearly, downloading is popular, but uploading is not as common. Just one in 12 people surveyed said that they had uploaded a video file to a video streaming site. Those brave enough to upload should be aware of production values, as 60% of viewers said that their favourite streams were professionally produced.
10 hours of video content is uploaded to YouTube every minute and here in the UK, a staggering 3.6 billion video streams are watched each month. 20 million people tune in to content on the site, far in excess of its nearest rival, the BBC, which draws in 6 million online viewers.
A new video and movie-streaming site, FilmOn.com is looking to capitalise on the growing popularity of online video streaming. Alki David, founder of the site does a good job of summarising the reason why web TV has become so popular:
“We’re trained to watch what’s on the box, but audiences are not fools and it doesn’t take long at all to change. The YouTube generation is a good example. You can seek what you want to watch when you want.”

Sep
17

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Nielsen’s Cross Platform Report:1.5 Million Homes Cut the Cord in Q1 2012

0 2 4

Americans continue to gobble up online video, watching almost 35 hours a week across all connected screens.

Nielsen’s Cross Platform Report for the first quarter of 2012 found the average TV consumer is watching six fewer minutes of traditional television per day, but overall viewing continues to grow as more people watch TV content online. (Our Online Video Index data shows a similar trend, as people watch more movies, sports and TV shows online.)
Last time we dove into this report, we found 1.5 million had cut the cord in the fourth quarter of 2011. Q1 reported even fewer traditional TV households with 114.3 million, down 190,000 subscribers from Q4 and down 1.46 million from the same period the year prior.
It’s worth noting that Nielsen is redefining what a traditional TV household means because while TV penetration continues to decline slowly — still standing strong at a 95.8 percent rate — 75 percent of non-traditional TV homes still own sets connected to the Web via gaming devices, over-the-top sets, Blu-ray players or through the sets themselves.
Among gaming consoles, Nintendo’s Wii stands as the most popular with 58 percent market share, followed by the Xbox 360 at 30 percent and PS3 at 23 percent.
When looking at the gender breakdown, women spend far more time (163 hours per month compared with 148 hours for men) watching on traditional TVs across all age ranges. For online viewing, it’s men who dominate, spending more than an hour viewing on the Web than women.  On average, women also watch more on mobile phones, at five hours and 21 minutes versus four hours and 44 minutes for men.
When looking at the breakdown by ethnicity and race, African Americans watch far more television than other groups at 210 hours per month. Second to that are Caucasians at 153 hours, with Asians trailing at 100 hours. African Americans also spend the most time consuming video across screens while Asians watch the most video on the Internet. Hispanics prevail with mobile video.
Jul
16

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Trending Up

Trending Up

Tom Butts
Editor-in-Chief
tbutts@nbmedia.com
I’m not a fan of tired ole clichés but humor me on this one. I’m only going to say it once: to paraphrase an old saying, “rumors of the demise of broadcast television have been greatly exaggerated.”

We’ve seen the signs for months, even years. Sales of over the air antennas have greatly increased; Antennas Direct, one of the nation’s leading providers of TV antennas says its sales have effectively doubled every nine months over the past several years. Been to a Best Buy lately? Check out their growing retail TV antenna section if you want to really see what’s happening.

These facts are now being backed up by the results of a recent survey released by NAB last month. According to new research by GfK Media, one of the world’s largest research companies, the number of Americans now relying on over-the-air TV has increased to almost 54 million, up from 46 million just a year ago.

Who are these revolutionaries who dare to buck the pay-TV trend? Not surprisingly, the demographics of broadcast-only houses skew towards minorities and lower income families, but you can also count younger adults as well. Many of these are referred to as the “cord nevers,” most of them combining free broadcast TV with over-the-top services like Roku, Netflix and Xbox. A recent survey from Nielsen backs this up, showing that the number of homes with broadcastonly TV and OTTP grew almost 23 percent over the past year.

The GfK Media survey, “2012 Ownership Survey and Trend Report,” found that 17.8 percent of all U.S. households with TVs use over-the-air signals to watch TV, compared to 15 percent reported as broadcast only in 2011. Overall, GfK estimates that almost 21 million households representing 53.8 million consumers get their television exclusively over the air.

“As we’ve seen for the past few years, over-the-air households continue to make up a sizeable portion of the television viewing landscape,” said David Tice, senior vice president, GfK Media. “Our research reveals that over-the-air broadcasting remains an important distribution platform of television programming.”

ClearStream digital antenna
The survey also revealed that six percent of TV households—approximately 6.9 million households, eliminated pay-TV service in their current home at some point in the past and now rely on terrestrial broadcast rather than pay-TV. This is up from four percent of TV households, which had eliminated pay-TV service at some point in the past in the research firm’s 2011 study.

Minorities make up 44 percent of all broadcast-only homes, up from 40 percent in 2011 and homes headed by younger adults—24 percent of those households with a head of the household 18-34—are broadcast only, up from 17 percent last year. Twenty six percent of households with an annual income under $30,000 receive TV exclusively over-the-air.

These TV viewers have decided that pay-TV isn’t always worth the price. Another survey, released in late June from deal aggregation website TechBargains.com noted that 33 percent of cable and satellite subscribers who have cut the cord said they would never sign up again even if pay TV providers “drastically” reduced their prices.

Naysayers will continue to discount such survey results, conveniently forgetting that it’s not necessarily the numbers, but the trends, which all continue to go up. Hopefully, as broadcasters continue to roll out new services, including more DTV channels and Mobile DTV, many viewers will discover, while others will be reminded, of how important a robust, flexible broadcast system is to our nation’s media landscape.

In this issue, we welcome a new member to our roster of industry experts. Al Kovalick, who I’m sure many of you know, will be taking over our “Count on IT” column.

I’ve known Al for many years and have always enjoyed our conversations on the future of broadcast and its relationship with information technology. Al has an impressive pedigree, with 20 years of experience in video systems design, workflow evaluation and analysis. He wrote the first book in the field on converged AV + IT systems and file-based workflows (“Video Systems in an IT Environment; The Basics of Networked Media and File-Based Workflows;” see www.AVITbook.com for more information). Currently Al is the principal at Media Systems Consulting in Silicon Valley. Before that he was Technical Strategist and Avid Fellow at Avid Technology, CTO for Pinnacle Systems and Chief Architect of Video Servers at HP. Al is also a SMPTE Fellow and was awarded the SMPTE David Sarnoff Medal in

Jun
21

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17.8 percent or 20.7 million U.S. households rely on OTA for their broadcast television viewing.

Michelle Clancy ©RapidTVNews | 20-06-2012

Attention cord-cutting enthusiasts: a full 17.8% of US TV households, or 20.7 million of them, now rely on free, over-the-air reception for broadcast TV, according to a study by GfK Media. That translates to 46 million to 54 million Americans out of the nation’s 300 million citizens.

Five years ago, only 14% relied on OTA signals. The culprit behind the escalating exodus is, unsurprisingly, the sluggish economy, not the attractiveness of online streaming services like Netflix, the study found.

In total, 6% of TV owners, or 6.9 million homes, said sayonara to cable, satellite and IPTV last year, led by younger Americans, minorities and low-income homes. Minorities account for 44% of all broadcast-only homes today. Meanwhile almost a quarter of homes headed by a person aged 18-34 are broadcast-only, in contrast to 17% of homes led by people aged 35-49.

“When asked why they cancelled TV service, the overwhelming majority, over 70%, cited cost-cutting; cord-cutting because of online options was cited by less than 20%,” said Dave Tice, senior vice president of GfK, in a blog post.

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