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Pay TV VOD Usage Is Growing, But Not as Quickly as SVOD Services

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The pay TV industry still faces serious hurdles in serving and satisfying online viewers, video metadata specialist Digitalsmiths finds in its just-released Q4 2014 Video Trends Report. Looking primarily at the online pay TV experience, the report find that while pay TV app adoption and awareness has grown year-over-year, there are still a large number of subscribers that don't use their cable or satellite provider's apps. Overall, 25.2 percent of subscribers have downloaded their pay TV provider's app, but around half of those people (52.1 percent) use the app less than once per week.

As consumers look for less expensive entertainment options, pay TV's giant channel lineups could become a liability. Digitalsmiths finds that a vast majority of pay TV subscribers (85.1 percent) watch the same channels over and over, while 78.7 percent of respondents watch only 1 to 10 channels. Moreover, 31.8 percent are overwhelmed by the number of channels they have access to. The high cost of providing those channels could become a detriment, Digitalsmiths warns, if improvements aren't made.

The report finds that pay TV transactional video-on-demand sales are growing—for example the number of pay TV homes renting one or more paid VOD movie or show rose 3.4 percent year-over-year—however it isn't growing as quickly as subscription VOD services, such as Netflix and Amazon Prime, which grew 8.0 percent year-over-year.

Customer education and data is what's needed to turn trends around, Digitalsmiths believes. "While many of the stats discussed in this section may be alarming, Digitalsmiths feels its customers are making important strides towards improving the overall pay TV experience. Equally important is knowing the consumers’ viewing habits and leveraging that information to properly market to and educate viewers about content and features/services the household is not currently engaged with but might enjoy," the report states.

The full report is available for free download (registration required).

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