40% of Cord Cutters would pay more for à la carte
September 21, 2011
Collectively, US pay-TV providers lost 400,000 subscribers in the second quarter – their single worst period in over three years, according to a new report from Strategy Analytics. Cable TV took the brunt of the hit, though Satellite operators were not left unscathed. While much of the subscriber loss can be attributed to traditional economic churners—‘deal seekers’ looking for a cheaper price—the percentage of those who say they’re giving up on pay-TV altogether is not abating.
The research firm suggests that these so-called ‘Cord Cutters’ are not the low value/low revenue ‘fringe’ customers they have been made out to be. The report – Endless Fun? Pay TV, Cord Cutting, and Churn – finds that Cord Cutters place a high value on content—and are three times more likely to report watching paid Video on Demand (VoD) than ‘traditional’ economically- motivated churners.
“The pay-TV industry has gotten it wrong on the topic of cord cutting,” said Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service and author of the report. “For the second consecutive year, our survey research clearly indicates that those who intend to cut the cord are high value, high-revenue customers – not the deadbeats they have been made out to be.”
Cord Cutters are motivated less by price, and more by control of content, according to the report; Service Providers should view this as an opportunity.
“Forty per cent of Cord Cutters – compared to twenty per cent of economic churners – said they would be willing to pay more than they currently do for pay-TV if it meant they could pick and choose content on an à la carte basis,” noted Piper. “Pay-TV providers should view this as an opportunity to customise and repackage content offerings to this growing segment.,” he advised.