Pay TV Consumers Want Fewer TV Channels At Lower Prices
- by Wayne Friedman , September 22, 2015
TV consumers want pay TV monthly subscriptions with fewer
channels and lower pricing. A new survey from Digitalsmiths, a TV search/discovery company owned by TiVo, says the ideal a la carte package is 17 to 18 channels at about $39.50 a month.
Current traditional pay TV packages from cable, satellite, or telco companies can offer around 200 channels at around $80 to $150 a month. The survey revealed that 61.6% are spending over $100 a month, with pricing climbing nearly 7% over the last two years.
The results came from over 3,210 consumers for Digitalsmiths’ second-quarter Video Trends Report.
While nearly 80% are interested in new a la carte pay TV packages -- as well as over-the-top services such as Sling TV, Sony Playstation Vue, CBS All Access, few are willing to switch.
About 2.3% plan to switch to an online app/rental service from a traditional pay TV provider. Those who are willing to cut cable/satellite service altogether amounted to 4.5%. Some 8% are planning to switch to another pay TV provider.
When asked whether they have switched to new cable/satellite providers in the last three months, 7.7% said "yes," but 92.3% said "no."
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What would really be interesting is the names of the channels that people would be willing to pay a few dollars per month for. I wonder what the top 17-18 program services might be in such a study.As a guess--CBC, ABC, NBC and FOX affiliates, plus another local broadcast "indie" station, a PBS outlet, then CNN, ESPN, Discovery, TNT, USA, TWC, Fox News Channel, TBS, History, A&E and Nickelodeon. Where does that leave all of the other services in an "unbundled world? Sure, some would survive, but many wouldn't. And would the winners really settle for $2 per month----or might they insist on $4 or, gasp, $8?
It is also interesting to note that since 2008 that the average person watches around 17 channels...even though the average HH count of availalbe channels grew from 129 to 189, according to Nielsen. Something is magic about that number 17 and how we control channel chaos. And, among the 17 channels, on average we think we use 10 or fewer most often. Thus is a reach curve born.
The much quoted figure that the average person "watches" about 17 channels, is based on Nielsen Household set usage tabulations for a one -week period. There are many time frames and this is only one way to look at it. In "TV Dimensions 2015" we took an average adult, not houseehold, and broke down the number of channels watched to some extent as follows: average day:3.4, average week:14.3, average month:23.3, average quarter: 32.3 a full year:44.9. So what time frame really defines how many channels "we" watch? And how many of the many channels we sample from time to time--as opposed to those that we view very often---do "we" really want?
It's not that easy a question to answer, especially when we realize that people often "discover" a channel they hadn't paid any, or much, attention to, via the sampling process. If you limit yourself to 17 channels you won't get a chance to make such discoveries and after a while, you will tire of some of the 17 channels you subscribed to. Then what? How do you decide what alternatives to consider when you never get a chance to see what else is out there?
The entire video industry like ALL satellite and cable providers make a real living on selling channels the customer does not want as the justification for their high monthly rates.
Example: On my DIRECTV bill there is a fixed monthly charge for sports even though I do not want nor have ever ordered nor ever watch sports.
How can a real honest business demand=force their customers to pay for something they do not want to just keep their profits higher?
The video satellite and cable industry seems the only one that gets away with this crime every month!!