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Digitalsmiths Report Highlights Challenges for Pay TV Industry

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Video metadata specialist Digitalsmiths has released its 2013 Q3 report on consumer online viewing behavior, and the results show plenty of challenges for cable and satellite providers.

Cord-thinning -- the act of cutting pay TV extras, usually due to subscription video-on-demand competition -- is on the rise. Nearly 17 percent of the consumers Digitalsmiths surveyed had removed services, a healthy increase from two quarters prior. Premium channels are usually the ones cut, the survey found.

Digitalsmiths sees cord-cutting as slowing down, with only 2.9 percent of those surveyed planning to cut their pay TV subscriptions in the next 6 months, a decrease from the previous quarter. However, the number of people answering "maybe" to that question jumped to 34 percent, showing that plenty of people are weighing their options.

In its previous quarterly report, Digitalsmiths introduced the term "cord-cheating" to describe consumers looking for on-demand video content as an alternative to their pay TV options. While it's unclear how this is "cheating," the survey finds huge growth in SVOD services, with 48 percent of respondents subscribing to them and nearly 29 percent using online pay-per-rental services. Nearly 73 percent of those surveyed never purchase on-demand video from their pay TV provider.

The survey questioned 3,177 pay TV customers. Download the full report for free (registration required).

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