October 26, 2018
With Comcast and Verizon this week reporting ongoing declines in traditional pay-TV subscribers, new data from Parks Associates shows that consumer perception of a poor value proposition in pay-TV remains the top trigger for changing, downgrading, or cancelling services.
Among households that have made pay-TV changes in past 12 months, one-third of cord cutters (33%) and 10% of switchers or cord shavers plan to use paid OTT services as a substitute or alternative for pay-TV.
In addition to subscription streaming VOD services such as Netflix, Amazon Prime Video and Hulu, online TV services include Sling TV, Playstation Vue, DirecTV Now, Pluto TV, Fubo TV, YouTube TV, Hulu with Live TV and Spectrum TV Plus, among others.
“The primary driver for pay-TV cancellation and downgrades continues to revolve around pricing and perceived value,” Brett Sappington, senior director, research, said in a statement. “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.”
Sappington said the “deeper issue” is in the influence OTT video is having on what consumers consider to be a good value. When video services with good quality are available for under $15, it forces operators to justify an $80 pay-TV bill.
Indeed, consumer Katie O’Shea from Travelers Rest, SC, said she plans to switch to $35 DirecTV Now as soon as she can get out of her $200 DirecTV contract – the latter including broadband service.
“I have 400 channels, most of which I don’t watch or even know what they are,” said O’Shea.