TiVo Survey Finds Cord-Cutting on Rise

Consumers willing to pay $15.30 for skinny bundle of top 10 networks
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The pay-TV world is likely to continue to shift, with more viewers cutting the cord and usage of subscription video on demand and TV everywhere on the rise, according to a new survey by TiVo’s Digitalsmiths unit.

In its quarterly Video Trends Report, a survey of 3,100 viewers found that 82.4% of respondents had a pay-TV provider. Of those that said they didn’t have a pay-TV provider, 17.9% said they’d cut the cord in the last 12 months.

The top reason for cancelling pay-TV was price, with 82.9% of cord cutters saying it was too expensive. The other top reasons for getting rid of cable were usage of a streaming service, cited by 59%, and using an antenna to get basic channels on TV, with 28.1%.

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Of the respondents that still have a cable/satellite service, 9.1% said they’d switched providers in the past three months. That’s slightly up from both the second quarter and from last year’s third quarter and the highest in the history of the survey.

When asked if they plan to change pay-TV providers in the next six month, 5.6% say they plan to cut the cord, 9.1% said they plan to change to another provider, and 2.5% said they will switch to an online service or app.

Another 29.7% said maybe they’d switch providers in the next six months, which means 44.9% of subscribers might leave their current pay-TV provider. Though a large number, it’s down 4.8% from the second quarter.

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The survey suggests that viewers are looking for more choice in pay-TV packages, with 78% saying they’d like to choose only the channels they want to watch. So they were asked about creating a la carte packages of 10 and 20 channels.

In the U.S., viewers said they would pay $15.30 for their top 10 channels. They said they’d pay $32.92 for 20 channels.

The top 10 channels consumers wanted in their packages were ABC and CBS, both chosen by more than 70% of viewers; NBC and Discovery, more than 60%; History, Fox and A&E, more than 50%; and PBS, TNT and TBS, more than 48%. Viewers said they’d pay between $1.52 and $1.41 for each of those channels.

Rounding out the top 20, were USA, FX, National Geographic, HBO, AMC, ESPN, Food Network, Comedy Central, Weather Channel and HGTV. Viewers were willing to pay about a dollar and a half for each of those channels, except for HBO, which they’d pay $3.13 for, and ESPN, worth $1.95, the survey found.

TiVo noted that in real life, there are no skinny bundles featuring all of the top 20 channels. If a consumer tried to build that type of package, the closest they could come is to get Sling TV’s All Channels package for $40, plus HBO at $14.95. They’d still need an over-the-air digital antenna to watch ABC, NBC, CBS and Fox.

The survey found that 61.9% of respondents use an SVOD service. Growth was down 2% since the second quarter but still up 5.6% from a year ago and 9.2% over two years ago.

Among the top services, Netflix was down 1.9% since the second quarter but up 2.8% since last year. Hulu was down 1.9% from the second quarter and down 2.2% from last year. Amazon Prime was up slightly since Q2 and up 4.9% from a year ago. CBS All Access, PlayStation Vue and Sling TV were relatively flat since last quarter and last year.

Respondents said they were paying more than a year ago on SVOD, and for the second quarter in a row, 10% of respondents said they share an SVOD account and do not pay to do so.

Those that have SVOD are frequent users with 92.3% of respondents saying they stream shows on a daily basis, with most of them saying they’re on for two hours or less per day and 81% saying they are pleased with their ability to find something to watch, up slightly from a year ago.

Speaking of Netflix, consumers said they like its prices, the ability for each member of the household to create their own profile, and the ability to search for something.

“The fact that ‘search’ was among the top three reasons why Netflix is appealing—and selection of this answer has increased 2.2% q/q—indicates respondents care about quickly and easily finding something to watch. Later in the survey, reasons for not using search functionality will be discussed. Pay-TV providers should note these reasons, and strive to innovate and compete with emerging video offerings,” the report said.

Awareness continues to rise for pay-TV providers’ TV Everywhere offerings, but it is still low, with just 47.1% of respondents saying they knew there was an app that let them watch on digital devices. Usage was up with 28.1% saying they accessed programming on tablets, smartphones or laptops, up from 23.9% a year ago.

The number of people using TV network apps to watch programming was also rising, with 28.4% saying they use one or more apps, up from 25.8% a year ago.

The most downloaded apps were CNN, ABC, HBO Go, Watch ESPN, CBC (in Canada) and CBS.

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