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Research: OTT, pay-TV gap continues to grow

July 29, 2021

Findings from research firm Parks Associates Video Services Dashboard, part of its Consumer Insights Dashboard service, reveal that 82 per cent of US broadband households subscribe to at least one OTT service, up six points year-over-year, while 58 per cent subscribe to a traditional pay-TV service, down four points year-over-year.

“The steady rise in online pay-TV adoption has made up for some of the significant drops in traditional pay-TV,” advises Steve Nason, Research Director, Parks Associates. “Video consumers are looking to online pay-TV services, either from a traditional provider or vMVPD, to offer a similar viewing experience and content offering to traditional pay–TV but at a lower price point. However, online pay-TV providers, who don’t typically generate content on their own, have had trouble stabilising subscriber costs as content fees continue to rise.”

The research firm reports 25 per cent of US broadband households subscribe to a TV service offering a bundle of live channels via an online provider, including 13 per cent who have both traditional and online pay-TV services. Adoption of vMVPDs, core online pay-TV services that offer bundles of live channels accessible via third-party connected devices, increased four percentage points to 18 per cent in Q1 2021. As Cord-Cutters or Cord-Nevers look for a more live/linear video viewing experience online, vMVPD service uptake has picked up.

“The Covid-19 pandemic accelerated many existing trends in the video services market,” adds Nason. “Moving forward, consumer preferences will continue to shift online as video viewers perceive these services to be less costly, more convenient, and more aligned with how they want to consume video programming.”

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