How Streaming Online TV Is Cutting Into Traditional TV Services

There is a direct correlation between consumer adoption of streaming online TV services and the attrition of conventional cable, satellite and telco television services, according to results of a nationwide consumer survey, published Monday by UBS.

The study, which was released as part of the equities research team’s update on the telecom and pay TV marketplace, has tracked the correlation over time beginning in July 2016, and the pattern appears to be accelerating with the adoption of streaming online television.

Only 69% of consumers who stream online TV services said they also subscribe to traditional pay TV services, which is down 24 percentage points from 93% who said so in July 2016.

“The video market in aggregate (i.e., traditional video plus vMVPDs) appears stable at this point with 101 million subscribers,” UBS analyst John Hodulik writes in the report, adding, “However, our biggest question is the sustainability of this base. We worry that this number is boosted by double-counting video subscribers while a growing number of DTC offerings are in the pipeline. Given the attractive promotional pricing and bundling of streaming services, customers have been subscribing to both traditional pay TV and streaming services.”

1 comment about "How Streaming Online TV Is Cutting Into Traditional TV Services".
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  1. Ed Papazian from Media Dynamics Inc, March 15, 2018 at 10:34 a.m.

    Joe, in the interest of objectivity, did they ask whether their respondents get TV reception exclusively via over-the-air reception.As we report in "TV Dimensions 2018",  this has been one of the fastest growing segments, now comprising about 14-15% of all homes compared to less than 10% five or six years ago. And these homes, like their "pay TV" counterparts, are exposed to TV commercials. The implication in the findings---not necessarily putting this on you---is that a lot of people have simply abandoned commercial TV in favor of streaming options. When you factor in the over-the-air-only group  with the "pay TV" homes, it turns out that very few SVOD  homes are not now serviced by commercial TV content accessed one way or another.

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