Parks: Confidence in Online TV Increasing Among Younger Consumers
November 29, 2018
Following a fiscal quarter that saw pay-TV operators lose about 1 million combined subscribers, new data from Parks Associates finds consumers’ willingness to recommend their service (net promoter score, or NPS) is waning.
The average NPS for traditional pay-TV providers in the third quarter was minus 19, down from minus 15 in Q1, although some providers such as Optimum and Dish Network improved their individual scores.
By comparison, the average NPS for the major online pay-TV and over-the-top video services was positive, although their overall scores declined from 2017 to 2018.
“The percentage of U.S. broadband households that do not subscribe to traditional pay TV increased from 16% in 2011 to 22% in 2017,” Brett Sappington, senior director of research, said in a statement. “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. A positive NPS score for these services suggests a positive perception and strong word-of-mouth activity.”
Parks said 79% of U.S. broadband households reported had traditional pay-TV subscriptions in early 2018. About 33% of pay-TV subs made a change to their service between Q1 2017 and Q1 2018.
“A key challenge for pay-TV providers is to design and launch services that will inspire loyalty among younger households,” said Sappington. “Older consumers profess higher loyalty to pay-TV providers, whereas younger households are more likely to have an OTT service.”