Connected TV users more likely to cord-cut, downgrade
August 8, 2013
Viewers with access to online video sources on their TV are more likely than their counterparts to be reconsidering the value proposition of incumbent pay-TV services, suggests a new report from The Diffusion Group (TDG).
The report – Net-Connected TV User Dimensions – finds that adult broadband users with an Internet-connected TV are twice as likely as those with non-net-connected TVs to be ‘highly inclined’ to cancel their current pay-TV service.
“For years, the casual relationship between the two behaviours has been questioned, and rightly so,” notes Michael Greeson, co-founder and president of TDG. “Yet TDG has argued for several years that this relationship would develop over time and hit an important landmark moment of sorts in 2013. That is indeed what has transpired, and now the pay-TV industry and prominent analysts are coming to terms with the fact those with access to online video sources on their TV are more likely than their counterparts to be reconsidering the value proposition of incumbent pay-TV services.”
TDG says that while it is undeniable that the vast majority of adult broadband users that currently subscribe to a traditional pay-TV service have little or no interest in cancelling their traditional TV service, the fact is that on average 7 per cent of this segment are would-be ‘cord cutters’ (highly likely to cancel in the next six months, answering ‘6’ or greater on a 7-point scale) should be of concern to operators; a rate of decline that is simply unsustainable, should these inclinations play out in the marketplace. Moreover, the proclivity is strongly correlated with the use of net-connected TVs.
As noted above, 8.8 per cent of connected TV users are highly inclined to cancel their current pay-TV service in the next six months, compared with only 3.5 per cent of non-net-connected TV users. In other words, connected TV users are more than twice as likely as their counterparts to ‘cut the cord’ in the next six months. “The data does demonstrate a notable correlation between the two phenomena, one we expect to grow more strongly in the next few years,” notes Greeson
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