According to a new Q1 2015 Digitalsmiths survey, 7.7% of respondents switched providers in the last three months, a 2.0% increase y/y. Additionally over the course of the
next six months, a total of 15.3% of respondents said they plan to either switch (3.1%), change (7.4%), or cut service altogether (4.8%), and 32.4% are on the fence and might need to be
enticed to stay. Added together, 47.7% of respondents need immediate attention to save them from cord-cutting, cord-cheating, or switching providers.
So
far, 2015 has proven to be one of the busiest years yet for new Over-the-Top (OTT) and Over-the-Air (OTA) services being launched, posing an even greater threat to Pay-TV, says the
report. In addition to key quarter-over-quarter and year-over-year trends, the Q1 2015 Video Trends Report covers many new topics spanning:
- Consumers’ awareness
and adoption of new video services such as Sling TV and Sony PlayStationVue
- New questions around consumers’ sentiment toward à la carte Pay-TV channel packages and
the monetary value they place on their most desired channels
- Pay-Per-View (PPV) content, and tips to drive more purchases
Of the 32.4% of
on-the-fence respondents, 44.0% said they would stay if their provider released new functionality that made it easier to find something to watch, a 6.1% y/y increase. These results
demonstrate respondents’ loyalty to their Pay-TV provider is dwindling, but functionality to improve the experience would be welcomed.
While a big portion of Q1
2015 respondents might be teetering on the idea of leaving their current Pay-TV provider, a metric equally important to monitor is overall satisfaction. Though a large population answered
“Satisfied” (55.9%) or “Very Satisfied” (19.9%) when asked to rate the value of their cable/satellite provider, 24.2% responded “Unsatisfied,” an increase
of 2.0% y/y and the highest since Q2 2013 results. Though the top reason for dissatisfaction was “Increasing fees for cable/satellite service;” it is important to note that while
“Bad channel selection” was the fourth most selected answer choice, it is still high at 33.8 percent, says the report.
Satisfaction With Level Of Value From
Cable/Satellite Service Provider? (Q1, 2015)
- VerySatisfied 19.9%
- Satisfied 55.9%
- Unsatisfied 24.2%
Reasons For Dissatisfaction Q1 2015
- Increasing fees for cable/satellite service 71.7%
- Increasing fees for Internet service 46.4%
- Poor customer service 38.1%
- Bad channel selection 33.8%
- Poor Internet service 32.5%
- Poor cable/satellite service
29.4%
- Other 13.8%
The high cost of Pay-TV service is one of the contributing factors resulting in changes in the industry. According to
survey results, 59.8% of respondents are spending over $100 a month with their cable/satellite provider.
55.7%, of respondents, are familiar with one or more OTT
services that provide live TV: CBS All Access, Hulu Plus, PlayStation Vue, Sling TV. This high level of awareness reinforces the fact that the marketing of these services is resonating with
respondents, which poses a huge threat to Pay-TV providers.
While the bulk of this survey is aimed at understanding consumers’ sentiments toward their Pay-TV
providers as well as emerging features and services, it is important to keep a pulse on respondents’ overall viewing behavior. According to the Q1 2015 survey results:
- 45.6% of respondents watch 1 to 3 hours of TV per day
- 51.3% of respondents watch 2 hours or less live TV per day
- 69.0% of respondents watch 2 hours or less of recorded TV per
day
- 46.4% of respondents channel surf 5 to 20 minutes per day
When asked about an à la carte option, 81.6% of respondents said they would
like to select only the channels they want to watch, rather than to sign up for one of the large pre-set channel packages that are commonly offered today. On average, respondents chose 17
channels to make up their ideal lineup, for which they would pay, on average, $38 a month. The top channels selected by this group were ABC, Discovery Channel, CBS, NBC, and the History
Channel.
While à la carte packages will not appeal to all Pay-TV subscribers, with the addition of new services entering the landscape, it is important to keep
a pulse on consumers’ sentiments towards this type of offering, concludes the report.
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