OTT Services Enjoy Strong Word-of-Mouth, Finds Parks Associates
Consumers are more likely to recommend online services than pay TV services, say the researchers at Parks Associates. The average net promoter score (NPS) for pay TV services was -19 in Q3 2018, a drop from -15 in Q1 2018. Parks declined StreamingMedia.com's request to learn the average NPS for OTT services, which makes comparison difficult, but apparently it's better than -15 as Parks says consumers are more likely to recommend OTT services. Parks noted that the average NPS for OTT services declined slightly from 2017 to 2018, but wouldn't say what either number was.
The NPS is a measure of a consumer's willingness to recommend a service. Parks questions heads of broadband-enabled households to get its numbers.
The company also reports that 79 percent of U.S. broadband-enabled households in the U.S. subscribed to a pay TV service in early 2018, a number that's been steadily dropping. One-third of pay TV customers made some kind of change to their service between Q1 2017 and Q1 2018.
"With each quarterly earnings report, pay TV providers and their stakeholders are hyperaware of variances in subscriber figures, and they are trying to reverse this trend with their own brands of OTT services as well as other value-added services," says Brett Sappington, senior director of research for Parks Associates. "A positive NPS score for these services suggests a positive perception and strong word-of-mouth activity."
The challenge now for pay TV services, he adds, is to launch new offerings that create loyal customers in younger households.
Biometric methods of signing onto services are more secure, but consumers prefer traditional password access.
Consumers are comparing high-priced pay TV services with lower-priced streaming plans, and for many streaming wins out.
Young people who post videos to online platforms and spend a lot of time watching shared content are less likely to opt for paid services.
Esports will emerge as a major profit center with 4 in 10 willing to pay for a subscription and roughly the same number willing to pay per event.