• by Wayne Friedman , October 6, 2016

A large number of TV consumers willing to pay for a new over-the-top TV service featuring a core of TV networks -- such as one proposed by Hulu -- would be older rather than younger consumers.

A new study shows those 45 to 54 “are the sweet spot,” says MoffettNathanson Research, with a price range of between $40 and $45. This research was conducted by Altman, Vilandrie & Company of some 5,000 respondents. 

Somewhat surprisingly, pay TV cord-cutters/cord-nevers are not likely targets. 

MoffettNathanson says: “It turns out the majority of likely subscribers are not cord-cutters and cord-nevers ... looking to spend more, but instead are households that are currently spending $100 or more looking to spend less.”

At around $35 a month, all this could pull in around 10 million subscribers at launch. But the downside for TV networks is cannibalization, says MoffettNathanson -- with 7.3 million of that 10 million coming from traditional pay TV platforms.

Much of this attraction for OTT comes from all TV consumers -- young and old -- who increasingly watch either TV shows or movies at least once a week. These numbers have climbed to 78% of 18-24s in 2016 from 57% in 2011; 35-44s are watching at least weekly 68% in 2016, up from 43% five year ago. 

Even older viewers have seen their online viewing growing dramatically; 45-54s are now watching 52% weekly online versus 32% in 2011.