Digitalsmiths: Pay TV Providers Making Adjustments

March 12, 2015 · Posted in Uncategorized 

By Chris Tribbey

Pay TV providers are making gains in the areas of consumer satisfaction and using consumers’ viewing habits to improve on their services, according to TiVo-owned Digitalsmiths’ latest quarterly Video Trends Report.

In the fourth quarter of 2014 more than 21% of pay TV subscribers said they were “very satisfied” with their pay TV service, and nearly 56% said they were “satisfied,” both up from a year ago. Additionally, more survey respondents said they increased their pay TV services (20.4%) compared to those who scaled back (16.4%), with premium channels, Internet and HD service ranking as the top three upgrades.

Still, 23% of survey respondents said they are “unsatisfied” with their pay TV service, and in the fourth quarter, nearly 9% of pay TV subscribers switched their service. In the next six months more than 4% said they’re cutting the cord, nearly 8% said they’re ready to change their service, and nearly 3% said they’re prepared to switch from pay TV to an online app or rental service for their content.

“While some of these numbers seem minimal, they should still raise concern for pay TV providers — since multiplied by millions of subscribers, the revenue threat alone is apparent,” the report reads. “Creating value for services and improving experiences is extremely important for all customers, but it is especially imperative for the consumers who are paying $151-plus per month for pay TV services.”

Nearly a quarter of the survey’s 3,000-plus respondents said they pay $151 or more per month for their pay TV service, and they’re not getting much bang for their buck: more than 85% said they watch the same channels repeatedly, and more than 31% said they’re overwhelmed by the number of channels. In the fourth quarter, 78.7% of respondents said they watch only 1 to 10 channels out of everything available.

Still, pay TV subscribers are watching: nearly 53% said they watch between 1-3 hours of TV a day, up 2.3% quarter to quarter. However, more than 26% said they watch less than an hour a day, a nearly 3% jump year to year.

On the TV Everywhere front, only 25.2% of respondents said they’ve downloaded their provider’s app, and 52.1% of those who do have it said they use it less than once a week. And pay TV providers continue to face an uphill battle against the likes of Netflix and Hulu, with nearly 70% of respondents saying they never use their pay TV service for VOD.

“Another level of competition for pay TV providers is the transactional on-demand services such as Redbox kiosks, Amazon and iTunes,” the report reads. “Thirty-one percent of respondents leverage these services, and of those 44.1% spend between $3 and $11 per month. According to survey results, adoption of these services is not increasing as rapidly as subscription services, but growth is indeed occurring with increases of 2.1% quarter to quarter and 2.3% year to year. Of the respondents who leverage these services, 37.5% use them 1 to 5 hours per week.”

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