Advanced Television

Subscribers will switch for discount

February 3, 2010

Over two-thirds of American pay television subscribers would be willing to switch providers if offered a price discount of 20 per cent, according to a report just published by Strategy Analytics. While Cable customers were the most likely to churn, only half as many (33 per cent) of Telco TV/IPTV subscribers would switch. The report, “Digital TV Customer Satisfaction: US Survey Results 2H’09,” surveys 856 digital pay television subscribers in the US.

Overall, respondents reported high satisfaction with their current digital television provider, with 71 per cent claiming to be “somewhat” or “very” satisfied. There was a marked difference, however, among access platforms. Telco/IPTV customers reported 95 per cent overall satisfaction, compared to 78 per cent for Satellite, and 67 per cent for Cable. Fewer than 22 per cent of subscribers—irrespective of platform—felt they were getting “value for money” that exceeded expectations.

“The value-for-money result was perhaps the most important finding of this study,” noted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service. “A growing number of customers are beginning to question the value of a “traditional” pay TV subscription in light of expanded “over-the-top” offerings, such as Hulu and Netflix.”

While Telco TV/IPTV is expected to make impressive strides in the upcoming years, the platform’s success is certainly not a foregone conclusion, according to Piper. In a highly penetrated market such as the United States, growth will not be organic. Rather, Telcos will need to articulate a compelling case for users to switch.

Categories: Broadcast, Pay TV, Research, Research Library