Pay TV Still Too Pricey
- by Wayne Friedman , September 27, 2017
With cord-cutting an ongoing worry, pay TV providers are plagued by TV consumers' concerns: high price and lack of a la carte channel choice.
A TiVo second-quarter 2017 survey showed 77.5% of consumers agreed with this statement: “I’d like to choose only the channel I want to watch.”
The survey also noted the average price respondents want to pay for a package of self-selected channels — $28.79 total per month — or $1.73 per channel per month.
In the U.S., TV consumers will pay a bit more for top 20 channels — $29.97, which is a 6% increase from the last TiVo report in the first quarter. Top 10 channels include: ABC, Discovery Channel, CBS, History, Fox, A&E, NBC, HBO, Food Network and AMC Network.
All this is about half to 75% less than TV consumers currently pay. TiVo says 47.5% pay anywhere from $51 to $100 a month — 36.2% pay $101 a month or more.
The slight silver lining for pay TV operators: Over half -- 52.9% -- are “satisfied” with their pay-TV service and 31.2% are “very satisfied.”
“Very satisfied” consumers' results improved 7.5 percentage points on a quarter-to-quarter basis; up 10.3 percentage points, year-to-year, and 11.6 percentage points higher over two years.
advertisement
advertisement
Wayne, if I read you right, the Tivo survey results show an almost 80% vote for ala carte.
If true, then offering "streaming bundles"...similar to cable video tiers...is not what consumers prefer but such skinny offers provide a lower-cost option. My view is that such pre-selected bundles are rumble strips on the path to ala carte.
James, while everyone, including myself, wants total freedom in selecting exactly what channels to subscribe to, from a business viewpoint the choices we would have in a 100% a la carte world would be very limited. For example your typical broadcast TV network spends about $600,000 per hour to buy or put out its programming, pay the rent and all of its staffers, pay Nielsen, make sales calls, transmit the shows, etc, across all dayparts. If we were to take a "selectively programmed" cable channel, which now gets about half of its income from ad sales and the rest from the cable systems/satellite distributors and slash its expenses to a fraction of what a broadcast TV network spends---to $50,000 per hour,----it would need something on the order of 3.5 million subs at around $8-10 per month, plus a small amount of ad dollars, just to break even and quite a bit more to make a decent profit. Larger cable channels, with much costlier shows would require many times this number of subs to compensate for the losses in ad dollars caused by much reduced coverage. With such economics to face, I doubt wether any of the smaller channels as well as many of the larget ones would survive---except at huge prices per sub---like $20 per month or more. I also doubt that they would get many takers at such rates.
Buying TV a la carte is like buying McDonald's fries by the chip.
... I'm sorry, but the small fries is still too much for me to eat, so can I just please buy 30 fries - and I only want to pay half a cent per fry.