According to the latest IHS Markit Connected Devices & Media Consumption survey, one-third of pay-TV households in the US have downsized their pay-TV packages, and that while pay-TV operators lost more than 7 million subscribers in the past five years, online video subscriptions have increased by more than 100 million over the same period.
Nevertheless, the latest analysis found that cord shavers are, in fact, content-hungry consumers. They use OTT to complement their pay-TV subscriptions, primarily for access to exclusive or original content.
Consumers who downgraded their TV packages – also known as ‘cord shavers’ – subscribed to more OTT video services than other pay-TV consumer households. Cord shavers who cited “cheaper alternatives available” or “lack of content” as reasons for downgrading, subscribed to an average of 3.7 OTT services, compared to an average of 2.2 OTT subscriptions for all cord-shavers.
Consumers choosing to cancel their pay-TV subscriptions and rely solely on OTT subscriptions, also known as ‘cord cutters’, are four times as likely to connect a Fire TV device to their primary TV set than all pay-TV households, and nearly six times more likely to connect a Roku Stick.
Highlighting a churn risk to pay-TV, cord shavers are more likely to connect their devices to their primary TV sets, and are less likely to first turn to their set-top boxes, when looking for something to watch on TV, suggests Fateha Begum, associate director of connected devices and media consumption, IHS Markit.
Consumers choosing to cancel their pay-TV subscriptions and rely solely on OTT subscriptions are mostly cost-conscious consumers. They are twice as likely to subscribe to Sling TV, YouTube TV and other virtual pay TV services than those consumers choosing to complement their existing pay TV subscriptions with OTT subscriptions. In cord-cutting households, digital media-streaming devices from Amazon and Roku are most commonly connected to their primary TV sets.
Consumers in ‘cord-never’ households – those that never had a pay-TV subscription, but which subscribe to OTT video services – have a stronger preference for viewing video on mobile devices. They were also less likely to stack video services and more likely to have specific content in mind, when looking for video content to watch.
Cord nevers also have a lower propensity to purchase connectable video devices and subscribe to video services. Dedicated video-streaming device ownership among this group of consumers is largely driven by gifting and promotional offers.