Price Points: Pay TV Risks Losing Gen Y

People-TV

If basic cable programmers are in fear of losing young customers due to soaring cable subscription prices, premium-priced pay television programmers could be at greater risk.

A new study says pay TV programmers are at risk of losing young TV viewers/consumers 18-29 -- so-called Generation Ys, about 70 million strong -- due to growing price sensitivities for all kinds of subscription television. Pay-TV networks monthly prices are added on top of existing packages for basic cable programming channels.

A study by independent research group for Ideas & Solutions!, a marketing consultancy, says 69% of the on-the-fence young cable customers, classified as "at-risk" responders, and 61% of those described as "leaners," say the expense of pay-TV networks is the main reason they would consider discontinuing their service.

advertisement

advertisement

An added concern: this cable demo also notes there are other alternative ways of watching entertainment content.

Those "at risk" consumers -- cord-cutting cable, telecom or satellite providers -- use Netflix and Hulu nearly 50% of the time. But when looking at the strong proponents of pay TV networks -- which the study calls "loyalists" -- only 29% use Netflix and 25% watch TV via Hulu.

Those in between "at risk" and "loyalist" pay TV consumers -- "leaners" -- use Netflix and Hulu, around 42%.

Glen L. Friedman, president and founder of Ideas & Solutions!, stated: "This is the demographic that completely transformed the music and the phone business and has already started to dramatically reshape the pay-TV ecosystem."

How can companies combat this tend? For those young consumers who are thinking about leaving pay TV networks behind, the survey recommends a shift in pay TV network marketing away from touting big-scripted shows playing in specific time periods. Instead, the effort should be around cost and service, as well as time-shifting and on-demand capabilities.

 

1 comment about "Price Points: Pay TV Risks Losing Gen Y".
Check to receive email when comments are posted.
  1. William Hughes from Arnold Aerospace, June 2, 2011 at 9 a.m.

    The price for Pay-TV continues to increase, while the quality of what's being payed for continues to DECLINE. A House divided against itself CANNOT STAND!
    I have NEVER seen a Business that continues to raise prices and lower the quality of its product stay in business for long. Yet this is how the Cable & Satellite TV Industry has operated for a little over a decade now. A lot of people I have talked to are sitting on the fence debating if they should cancel their subscriptions. Sooner or later I see a collapse coming. When it happens, LOOK OUT!

Next story loading loading..