OTT Services Make Pay TV Look Like a Poor Value, Parks Finds
When consumers can get a streaming video service with live channels and an on-demand library for $15 per month, their $80 per month cable or satellite service starts to look like a poor value. That's one finding from Parks Associates, which revealed video OTT and pay TV data today.
Looking at households that have changed their pay TV service in the past year, Parks finds 33 percent of those cutting the cord and 10 percent of those trimming their service see streaming options as a substitute for pay TV. Streaming is emerging as a better value for many viewers.
"The primary driver for pay TV cancellation and downgrades continues to revolve around pricing and perceived value. While some consumers consciously plan to use OTT video services to address the absence of pay TV content, most consider each offering on its own merits," says Brett Sappington, senior director of research at Parks Associates.
When U.S. broadband households that changed their pay TV service in the past year were asked why they did so, the most common reason was that the service wasn't worth the monthly price. The second was that the provider increased the price, and the third that the customer liked the service but could no longer afford it.
Parks Associates' report "Churn and Retention in Pay TV" is available for purchase.
Household spending on online video has remained fixed since 2014, reports Parks Associates, staying at around $8 to $9 per month.
The number of pay TV subscribers will grow by 380 million from 2010 to 2024, but total global revenues will fall by 14% to $177 billion during the same period.
The future belongs to blended servcies. Creating an IP transformation that relies on multicast-assisted ABR streaming is a potential key to quality improvements and cost savings.
Biometric methods of signing onto services are more secure, but consumers prefer traditional password access.
Consumers are dropping pay TV subscriptions for over-the-top services, and they're happy to recommend their favorites to their friends.
HBO Now and Starz enter the top five, showing the popularity of premium original content to subscribers, says Parks Associates.
With major new competitors entering the over-the-top video space in 2019, services will rely on bundled offerings, unique functionalities, and original content to stand apart.
How are cutting-edge content services finding ways to make money in a crowded field? Read on for advice from Ellation, Xumo, FandangoNow, and others.
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.
Consumers no longer understand the point of having access to hundreds of channels they never watch, with all generations dissatisfied.
While few customers have adopted Sling TV, DirecTV Now, or similar services, user sentiment is strong among those who have.