M+E Daily
Consumers Still Want Their Subscription TV
Story Highlights
By Paul Sweeting
Consumers may be cutting the cable cord but they’re not giving up on subscription TV services. According to a new study by PriceWaterhouseCoopers, the majority of households have more than one subscription video service, including both traditional pay-TV and over-the-top services.
The trend is most pronounced among younger viewers. Among 18-24 year olds, 56% have more than one service, while 51% of those 24-35 have more than one. Older viewers are far less likely to have multiple pay services, with only 19% of viewers 50-59 relying on more than one. Netflix is by far the most popular non-traditional paid-video service, with 41% of consumers reporting subscribing to the service, followed by Amazon Prime at 18%, iTunes at 16% and Hulu Plus at 8%.
More than 90% of viewers continue to pay for either traditional cable or satellite TV service.
While consumers may be subscribing to more types of pay-TV services than ever they increasingly want their TV on their own terms. In the survey, an overwhelming majority (73%) said they would prefer to buy TV channels on an ala carte (44%) or highly customized (29%) basis. Another 6% said they would like to have virtually all programming available on-demand, rather than via branded, linear channels.
According to a recent report by Needham & Co. analyst Laura Martin, such unbundling could be disastrous for the current TV business, slashing industry revenue by as much as 50%. And the PwC survey lends some support to that view. According to the study, 65% of consumers say they would pay for 10 channels or more if offered ala carte, while 26% would order 6-9 channels. Older consumers are more willing to pay for bigger bundles than are younger viewers.
Asked how much they would pay per channel, however, and the greatest percentage of consumers (62%) said they would pay up to $2.99 per channel, per month, and as many as 26%, said they would pay $4.00-$8.00 per channel, per month (the two groups overlap). As PwC analysts point out, even a hypothetical ala carte package of 10-30 channels at $3.00 per month would leave most consumers paying far less for cable service than they do now.
The full PwC study can be downloaded here.
