Commentary

Pay TV Downgrades Linked To OTT

by Daisy Whitney , Op-Ed Contributor, May 6, 2016

Streaming video viewing and TV viewing go hand in hand -- except when they don’t.

While a number of studies have shown that streaming video viewers are avid TV watchers as well, many who actively use over-the-top services say they’ll downgrade their multichannel video services in the coming months.

In fact, viewers who are most likely to downgrade their pay TV over the next six months spend a little more than 25% of their time watching streaming video, according to a new study from The Diffusion Group.

These new findings suggest a possible consumer shift. For some heavy streamers, new streaming viewing options are becoming the norm, which also means they may feel more inclined to cut back on pay TV.

TDG found that those who will definitely cut back spend 36% of their time streaming video, those moderately likely to do so weigh in at 26% of their time spent streaming, and those slightly likely to downgrade watch online 21% of the time.

The data is worth noting, as it suggests a correlation between the likelihood to downgrade and the higher use of OTT services. The insight is also a good reminder for operators to stay nimble since the number of alternative video sources is growing. With more networks and programmers offering direct-to-consumer programming, viewers may have less need for a pay-TV service, which increases defections or cutbacks.

In related news, as the use of streaming video grows, so does ad spend in digital video. Marketers have more than doubled their ad spend in original digital video in the last two years, according to a just-released Interactive Advertising Bureau study.

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4 comments about "Pay TV Downgrades Linked To OTT".

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Jack Wakshlag from Media Strategy, Research & Analytics, May 6, 2016 at 1:29 p.m.
The Diffusion Goup has predicted a massive decline for Television for the past five years or more. Their predictions have been wrong each and every time. The fact is that erosion is small and were it to continue at current rates for ten years would not be the death or end of television as we know it. How they remain in business is a mystery to me. When do firms like these become accountable?
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Ed Papazian from Media Dynamics Inc, May 6, 2016 at 2:03 p.m.

Jack, they are paid by those who get what they want to hear from this kind of "research". It doesn't matter if it never happens the way the research suggests. People with agendas want to believe that they will be proven right ---eventually---and this kind of pandering reassures them.

Jack Wakshlag from Media Strategy, Research & Analytics replied, May 6, 2016 at 3:22 p.m.

Totally agree Ed. Since such companies often use this to help raise money, financiers should eventually learn that a recommendation based on this firm's opinion is just that, an opinion. An that opinion has been wrong repeatedly. You don't dress based on information provided by a faulty thermometer once you know it has been wrong over and over.

A research company has to be accountable some time.

Jack Wakshlag from Media Strategy, Research & Analytics, May 6, 2016 at 6:35 p.m.

According to the FCC report issued today, MVPD households declined from 101.7 million to 101.6 million in 2014. This is their most recent report. What does the Diffusion Group have to say about their prediction for this point in time? How wrong were you?