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Deloitte Sees Value Gap Between What Pay TV Viewers Want and Get
Consumers no longer understand the point of having access to hundreds of channels they never watch, with all generations dissatisfied.

In the streaming age, viewers increasingly don't see the value in pay TV subscriptions. That's one of the takeaways from the 2018 Deloitte Digital Media Trends survey. What felt like a luxury in previous decades—one service providing hundreds of channels—now feels bloated, wasteful, and unnecessary.

Deloitte surveyed over 2,000 U.S. consumers age 14 and up, finding roughly half of pay TV customers are unhappy with their service. The biggest reason is cost, with 70 percent saying they get too little value for the money they spend. Bundles have proven to be golden handcuffs for viewers, with 56 percent saying they only keep their pay TV service because it's bundled with their home internet service.

In the coming years, 5G cellular to the home could make cable subscriptions less necessary, the report points out, and those bundle subscribers could leave for good.

Looking at non-subscribers, Deloitte finds 21 percent say they don't watch enough television to justify the expense of pay TV and 19 percent say they can't afford it. Many Gen Z, millennial, and Gen X households (between 16 and 22 percent) have never had a pay TV subscription and are unlikely to start, the report says. For them, streaming is now completely mainstream. To satisfy those customers, companies will create new bundling options.

“Access to original content is a major driver of the growth in streaming services and I expect that to continue in 2018," says Kevin Westcott, U.S. media and entertainment leader at Deloitte. "Ultimately in 2019 and beyond, I expect some of the larger platforms to look at a re-aggregation strategy with more services on their platform and one user experience and billing arrangement. Once the cumulative cost of streaming services surpasses pay TV pricing, we will likely see a slowdown in the growth of SVOD platform launches.”

Deloitte has put the full study online with no registration required.

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