Pay TV Subscribers Changing Packages, Not Necessarily Leaving

Nearly a quarter of consumers who subscribe to pay TV made changes to their subscriptions over the past year. But that news isn’t as bad as one might expect. 

According to Parks Associates, of those who made changes to their service, 11% cut or downgraded their packages -- but 9% upgraded their subscriptions to include more channels, premium channels or some sort of new technology, like a DVR. 

“We’re seeing a lot of folks making changes to their packages,” Brett Sappington, director of research for Parks Associates, tells Marketing Daily. “There’s a lot of change within the services, but there’s not a whole lot of change within the subscriber base.” 

Overall, 85% of U.S. households with broadband had pay TV services in the second quarter of 2015 compared with 87% in the third quarter of 2011 -- only a slight decline over nearly four years, which suggests that pay TV’s demise may be a bit overstated. (The percentage of consumers who have never subscribed to a pay TV service has held steady since 2012.)

“It's a broader picture than simply the decline and fall of pay TV,” Sappington says. “Not all of the motion is working against the TV industry.”

Still, many consumers are looking for better broadband services (which may enable more cord-cutting in the future). According to Parks, 10% of households with broadband intend to upgrade to a faster service, while only 4% intend to downgrade to save money. Over the past year, 13% of households that already had broadband received faster internet speeds from their provider without paying a higher price. Meanwhile, of those who switched, a quarter of them did so in order to get faster service at a comparable price. 

“The overall volume of video consumed across platforms is as high today as it has ever been,” Sappington says. “As that consumption shifts to new devices and new content sources, revenues will inevitably shift as well.”

2 comments about "Pay TV Subscribers Changing Packages, Not Necessarily Leaving".
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  1. Ed Papazian from Media Dynamics Inc, August 18, 2015 at 5:58 p.m.

    You mean that there still are pay cable subscribers? I thought that they had all deserted to Netflix. What happened to all of those "cord cutters" we keep hearing so much about?

  2. James Smith from J. R. Smith Group, August 19, 2015 at 9:50 a.m.

    Right Ed!  I'd like to see the age tabs on that data by video sub level. Not too many folks that I talk with say cord cutting is NOT a big concern as the value propositions behind tiering structures are losing some practical and economic gloss.

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