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Viewers conflicted on cord cutting

October 1, 2013

cord-cuttingA survey by MarketCast on the consumer view of the future of television highlights conflicts on cord-cutting: a number of viewers both support the idea of a la carte offerings to reduce costs but complain about the problems for would-be cord cutters, including the maintaining multiple subscriptions.

The survey also highlighted the widespread perception among consumers that major changes are just around the corner for multichannel TV. “While only 25 per cent of consumers think that traditional TV service subscribers are in the minority today, 53 per cent think that those who subscribe to this model will be in the minority in 5 years.”

The report generally found that TV viewers are looking to “maximise control, minimise cost and streamline the TV viewing and subscription experience” but found a great deal of confusion over how those goals might be achieved.

“What started out as a study about cord-cutting led us down a journey into evolving consumer preferences and the relationship viewers have with their TV service providers,” said MarketCast CEO Henry Shapiro. “All of these dynamics are complicated by the availability of programming choices and consumption mechanisms that didn’t even exist a few years ago. Consumers want to have their cake and eat it too. But they also want that cake to be low cost and to have no calories.”

One notable finding was that when thinking about the ideal package of television services, a la carte programming is the most desired feature, second only to low cost. “In an ideal world, consumers would have total access to all content, but pick and choose (and pay for) only the programming they want,” the study said.

The survey, which was conducted online among 1,200 American TV viewers ages 18-49, also found that consumers disliked the idea of having to subscribe to multiple services.

Half of “Cord-Cutters” – those who don’t subscribe to traditional multichannel TV services — say they stopped their subscription because they didn’t want to pay for channels they don’t watch. But the survey also found that their biggest frustration with over-the-top services such as Netflix, Hulu, and Amazon Instant was the problem of having to manage multiple subscriptions.

That problem was also “the number one reason why cord-connected consumers stick with their existing services, despite their being plenty vocal about other problems with their provider,” the study found.

In addition, “around four in 10 of those who currently subscribe to a traditional service say that they are ‘extremely’ or ‘very likely’ to cancel in the future,” the study found. “However, the near-term threat to traditional providers is much less severe. Seven in 10 of these ‘Cord Considerers’ admit that their bundled service package (for example, with Internet or telephone service) remains a major tether to their existing provider.”

Consumers also expressed worries about the lack of programming available from over-the-top services and around 60 per cent of Cord Considerers admitted that “they simply lack the conviction to follow through.”

It also found that “only 18 per cent of TV viewers value live sports access more than other features, but for this small group, sports trumps everything else.”
Looking forward the study found that on demand content and being able to view programming when they wanted it was “nearly twice as important as TV anywhere” service that would allow them to view the programming on multiple devices.”

Standalone premium services like HBO Go might convince more consumers to cut the cord, however. About “27 per cent of premium TV service subscribers who are considering cutting the cord say that they would ‘definitely’ do so and just subscribe to a standalone premium service if they could,” the study says.

But only a small number of those who had already cut the cord (about 12 per cent) say they would “definitely” subscribe to a new standalone service that allows them to access premium channel content like HBO Go.

The survey also found that “compared to other groups, cord cutters demonstrate the highest average annual consumption for paid media” and “are spending more on television episodes and entire seasons via purchases and rentals of DVDs, Blu-ray discs, and digital downloads.”

Categories: Articles, Broadcast, Consumer Behaviour, OTT, OTT, Pay TV, Research