Pace of Cord-Cutting, Churn Slow in New TiVo Survey

High price remains consumers' biggest complaint
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Pay-TV subscribers seem to be a bit less volatile and may be a bit slower in switching providers or cutting the cord, based on a new survey by TiVo.

When asked, 82.8% of respondents said they had a cable or satellite service, with 17.2% saying they did not have cable or satellite service, according to the 19th edition of TiVo’s quarterly Video Trends Report.

That’s down from 82.4% having pay TV and 17.6% without in the third quarter a year ago.

Of those with pay-TV service, 7.5% said they switched providers in the last three months.

“While this is at its lowest level since the Q2 2014 survey results, it represents a significant chunk of pay-TV subscribers for any provider to lose in a year, let alone in a quarter,” TiVo said.

Pay TV has been losing subscribers, which hurts the bottom line of operators and networks alike. The report takes a closer look at how consumers are getting programming and their attitudes and usage of new and old delivery systems.

Related: TiVo Has Moved Well Beyond 'Hardware Company' CEO Says

Of those with pay-TV service, 5.4% said they plan to cut their pay-TV service. A larger number of subscribers said they planned to change to another pay-TV provider (7.7%) or planned to switch to an online service or app, such as Netflix, Amazon or Hulu (5.8%). Another 27.5% said they were “maybes” in terms of making a change.

Of those without pay-TV, 20.2% cut the cord over the past year. That’s down from almost 23% in the second quarter, but up from under 18% a year ago.

TiVo says it’s the first time since the third quarter of 2016 that there’s been a decrease in subscriber churn.

“This quarter’s decrease is a positive for pay-TV providers, and while it’s possible, service cuts may continue to trend downward, the fact remains that one-fifth of respondents still cut service in the last 12 months,” TiVo said in the report. “An audience of that size still makes it imperative to understand what factors caused the behavior.”

The top reasons for giving up pay-TV services were the same as they’ve been for more than a year: it’s too expensive, said 85%; 41.5% said they use a streaming service and 23.6% said they’re using an antenna to get basic channels.

TiVo found that 48% of pay-TV customers pay between $51 and $100 per month, and 36.8% pay $101 to $150 per month, with $9.5% paying more than $151.

It is the highest paying customers—above $100 a month--who tend to say they are unsatisfied with their service, which created a dilemma for providers.

What would keep a pay-TV subscriber from switching providers? The top response from consumers was an a la carte plan or a skinny bundle offering. They also wanted all content to be combined in one place and improve content discovery.

Related: Pay-TV Universe Shrinks to 79% of US Households

Which channels did most people want in their skinny bundles? The most popular channels named were ABC, CBS, Fox, Discovery, A&E, NBC, HBO, History, Food Networks and AMC.

If they could choose channels a la carte, consumers would choose on average 24 channels and pay a total of $34.45 per month, or $1.44 per channel. The channel they were willing to pay the most for was HBO at $2.53. The other channels they would pay the most for were Revolt, Cinemax, AXS TV, Starz, Telemundo, Showtime, Fusion, NFL Network and Adult Swim.

According to the survey, 90.9% of viewers watch live TV daily, up 5.2% from a year ago, with 9.3% more saying the watched 5 hours or more of live TV daily. That compares to 66.9% show said they watch recorded TV, and 62.4% who watch OTT and SVOD content daily.

Among the SVOD and OTT services, Netflix is tops with 51% of consumers using it. That’s followed by Amazon, Hulu, Showtime HBO How, Starz, Youtube Red, CBS all Access, DirecTV Now, Sling TV, Hulu with Live TV, PlayStation Vue and Fubo TV. There were 36.4% of consumers who said they did not use any of the OTT services.

TiVo says that 27% of respondents said they had TV network apps, the largest percentage since the beginning of 2016. The most popular apps belonged to ABC, CBS, CNN, HBO, ESPN and Fox.  

“TiVo believes integrating OTT services into the set-top box keeps viewers within the pay-TV providers’ environment,” the report said.

Of those without pay-TV, 45.9% use an antenna to watch over the air broadcasts. TiVo says the over-the-air market is growing slowly and could be saturated, with consumers possibly turning to skinny bundles, such as Sling TV or PlayStation Vue.

TiVo surveyed 3,013 consumers in the U.S. and Canada using a third party survey service.

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