More Consumers Plan to Cut Pay-TV Cord

Digitalsmiths' 3Q survey finds subscribers want lower prices, more choice
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More consumers are looking to cut the cord, giving up their cable and satellite subscriptions in favor of either over-the-top or over-the-air options, according to a new survey by TiVo's Digitalsmiths unit.

Among those surveyed in the third quarter who have pay-TV service, 4.8% said they were planning to cut cable and satellite service, up from 4.3% a year ago and 2.9% in Q3 of 2013. Another 2.7% in the third quarter of 2015 said they were planning to switch to an online app or rental service from their pay-TV service, up from 1.7% in 3Q 2014, and 2% in the 2013 quarter.

The survey found that 7.2% were planning to change cable or satellite providers. That was also up from 6.9% a year ago and the same figure in 2013. In the past three months, 8.1% of those surveyed switched pay-TV providers.

The churn could be avoided. 48.2% said they would consider keeping their pay-TV services if their provider made it easier to find things to watch.

But cost is also a factor, 23.9% said their pay-TV bill was more than $151 a month, up from 21.1% two years ago and 40.8% said they were paying more than they did 12 months ago.

Even as prices go up, the percentage of consumers who say they’re very satisfied with their pay-TV services is up to 21.1% in Q3 2015 from 19.9% two years previously. But at the same time the number of unsatisfied customers is also rising, hitting 24% up from 21.5%. Among the unsatisfied, the problems included increasing fees for TV services, increasing rates for Internet services, poor customer service and bad channel selection.

Of those surveyed who did not have a pay-TV subscription, 19.3% said they’d cut the cord in the past 12 months. 42% said they cut the cord more than a year ago and 38.6% said they’d never had a pay-TV subscription, making them cord-nevers. Among those without pay-TV subscriptions, 45.1% had antennae to receive over-the-air broadcast signals, up 11.8% in the second quarter of 2015.

A large group of consumers said they’d like an a la carte system with 76.7% of those surveyed saying they want to be able to pay for only channels they watch. But that number was down from last quarter and first quarter, when it was as high as 81.6% Among the top 20 channels consumers said they’d like included in their packages were the four big English language networks, Discovery Channel, History, A&E, HBO, National Geographic, PBS, Comedy Central, AMC, Food Network, FX, HGTV, TNT, Weather Channel, Animal Planet, TLC and TBS.

Meanwhile consumers are adding over-the-top to their video diets. The survey found that 56.3% have OTT subscriptions, up 3.6% from a year ago and 8.1% over two years. The top OTT services were Netflix, which was up 2.6% since last year and 7.3% over two years; Amazon Prime, up 2% from last year and 7% over two years; and Hulu, up 2.5% from last year and 2.7% over two years. Respondents using OTT services said they were convenient (56.9% down from 62.1% a year ago), cheaper (49.1%, up from 47.2%), provide an ability to watch certain TV shows and whole seasons (45.3% down from 46.9%), and have a better selections of programing (37.8% vs 36.2%).

Awareness of TV Everywhere was up, according to the survey, and more are using it. The survey found 43.1% of respondents were aware their pay-TV provider offers TV Everywhere, up from 41.6% a year ago. The survey found 23.9% of respondents have downloaded the app, up from 23.7% a year ago and that 97% use it seven days per week.

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