According to DigitalSmiths new report on key trends facing the media/entertainment industry today, the Q3 survey findings continue to support a positive trend for Pay-TV providers, showing that only
2.9% of respondents plan to cut their cable/satellite service in the next six months. However, a threat still persists with 6.9% planning to change providers and 2% planning to switch to a
third-party app or service.
Cord-thinning, the act of cutting one or more Pay-TV services, is a trend continuing to rise, according to the survey results. Nearly 17% said they decreased or
removed services, a relatively significant increase from Q1 2013. Of the services thinned, “reduced level of cable/satellite service” increased the most to 45.2%, with premium
channels the highest ranking service cut, though they still remain the top ranked services added, with HBO leading the pack.
Of the 17.2% of consumers who increased their
cable/satellite services, premium sports packages saw a huge jump quarter over quarter. There is still huge revenue potential through upselling subscribers, says the report, since 62.7%
of respondents do not pay for premium channels and a larger audience does not pay for sports packages.
Overall, satisfaction remained steady at 58.6%, but still far from impressive.
Respondents who are unsatisfied rose slightly, totaling 21.5%. When asked about dissatisfaction issues, the top reason was increasing fees while others cited were poor cable/satellite
service, poor Internet service and poor customer service. In addition, of those respondents planning to cut, change or switch to other apps/third-party services, 40.4% said they would reconsider
staying if their provider released new functionality that made it easier to find something to watch.
Perceived Value Of Service Provider |
How would you rate the level of value you are receiving from your
cable/satellite service provider? |
Very satisfied | 19.9% |
Satisfied | 58.6% |
Unsatisfied | 21.5% |
If unsatisfied, why do you feel you’re not getting enough value from your provider? (choose all that apply) |
Poor internet service | 28.4% |
Poor cable/satellite service | 32.5% |
Bad channel selection | 33.4% |
Poor
customer service | 39.2% |
Increasing fees for internet service | 40.6% |
Increasing fees for cable/satellite service | 70.4% |
Source: Digitalsmiths, December 2013 |
There is a significant decrease in the number of consumers watching 3+ hours of
TV a day, says the report about TV viewing habits. This quarter, the majority of respondents, just over half, watch 0 to 3 hours of TV a day. Similar to overall TV viewing, consumers are
watching less live TV accessed from their channel guide. 54% of respondents watch two hours or fewer of live TV from their channel guide, a decrease quarter over quarter.
In
addition, 80.2% of survey respondents watch only 10 channels or fewer. These results demonstrate that much of the content Pay-TV providers pay a premium to offer subscribers is not being
leveraged to its greatest potential. In addition, the number of respondents who have difficulty trying to find something to watch grew from 32.5% in Q2 to 36.8% in Q3. All of these stats
point to the possibility of a growing dissatisfaction and disengagement by consumers.
Trend Repitition Do you feel you watch the same channels over and over again? |
Quarter | % Saying Yes |
Q1 2013 | 85.5% |
Q2
2013 | 86% |
Q3 2013 | 88.9% |
Source: Digitalsmiths, December 2013 |
TV Viewing: On average, how many hours a day do you watch TV? |
Hours Watching TV | % of Respondents |
<1 hour | 6.1% |
1-2 hours | 2.1% |
2-3 hours | 25% |
3-4 hours | 17.6% |
4-5 hours | 11.8% |
5+ hours1 | 2.8% |
Source:
Digitalsmiths, December 2013 |
Viewing Live TV: On average, how much of your daily TV watching is of live TV accessed from your channel guide (not DVR’d or recorded shows)? |
Hours Accessed | % of Respondents |
<1
hour | 25.7% |
1-2 hours | 28.6% |
2-3 hours | 17.2% |
3-4 hours | 11.5% |
4-5 hours | 5.9% |
5+ hours | 6.6% |
Source: Digitalsmiths, December
2013 |
Recorded
Shows(On average, how much of your daily TV viewing time is spent watching shows that you have recorded/DVR’d?) |
Viewing Time | % of Respondents |
<1 hour | 46.4% |
1-2 hours | 27.2% |
2-3 hours | 12.5% |
3-4
hours | 4.9% |
4-5 hours | 2.6% |
5+ hours | 1.9% |
Source: Digitalsmiths, December 2013 |
Channel Surfing(On average, how much time a day do you spend searching or scrolling through the guide looking for something to watch?) |
Surfing Time | % of Respondents |
<10
minutes | 48.5% |
10-20 minutes | 26.5% |
20-30 minutes | 10.9% |
30-40
minutes | 4.6% |
40-50 minutes | 2.5% |
60+ minutes | 2.5% |
Source: Digitalsmiths, December 2013 |
What To Watch(How often do you know what you’re going to watch when sitting down to watch TV?) |
Frequency | % of Respondents |
< 10% of the time | 7.6% |
10% - 20% | 5.5% |
20% - 30% | 6.5% |
30% - 40% | 5.9% |
40% - 50% | 11.5% |
50% - 60% | 11% |
60% - 70% | 8.4% |
70% - 80% | 16.6% |
80% - 90% | 15.3% |
90% - 100% | 11.8% |
Source: Digitalsmiths, December 2013 |
The future of Pay-TV providers’ VOD revenue is looking somewhat brighter, according to survey results. For the second quarter in a row, respondents are ordering more movies from
their Pay-TV provider, with 27% stating s/he orders one or more movies per month. When respondents were asked if it’s easy to find a movie they will enjoy in the VOD catalog provided by
their cable/satellite provider, 25.7% said “no,” a slight increase over Q2 2013 survey results.
Pay-TV VOD Purchases Per Month |
Rentals | Quarter |
Q1 2013 | Q2 2013 | Q3 2013 |
0 rentals | 78.5% | 73.8% | 72.9% |
1 rental | 10.7% | 11.2% | 13.3% |
2 rentals | 5.4% | 5.6% | 6.7% |
3 rentals | 2.1% | 3.4% | 2.7% |
Source:
Digitalsmiths, December 2013 |
Consumer rationale for third party services:
- Sixty percent of survey respondents cited convenience as the
top reason for using third-party video services. 61.4% of survey respondents who use Redbox Kiosks at retail stores do so because of convenience. This perception contradicts the reality of
the cost in time and money of driving to the store, possibly waiting in line, and then having to go back again to return the rental. This is a far greater time investment than simply
accessing a VOD title directly from one’s TV
- Second to convenience and a consistent finding quarter over quarter, 48.3% of respondents believe third-party video services are
“cheaper,” which clearly demonstrates Pay-TV providers must find a way to offer more competitive pricing to put a stop to this increasing missed revenue opportunity
- The Q3
2013 survey results show an increase to 23.4% of respondents choosing third-party video services due to the ability to watch content on an iPad/tablet. Connected devices are evolving the
space in such a way that consumers now want to be able to view video content on multiple connected devices, and outside the home
- “Better selection” responses for third
party services increased to 32.9% and “Easier to find what you’re looking for” rose to 30.2% from Q2 2013 survey results
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