Pay-TV, OTT getting less competitive to each other

Michelle Clancy | 22-10-2012

About 12% of consumers are willing to pay up to $10 per month for a premium video tier, while another 26% would pay $5 more, according to a new report from Heavy Reading. Cost sensitivity remains very high, consistent with the previous years since 2008.

Meanwhile, satisfaction is comparatively high for most service attributes and more than 40% of subscribers are staying with their pay TV providers for five years or more.

ISPs, however, are in a sensitive position with regard to subscribers' over-the-top (OTT) experience: More than one in eight would definitely switch providers for a better online video experience. Other findings include that 16% would pay for a "boost button" at $1 per use for online video, while 31% would pay for a white-listed site which would always offer a higher Quality of Experience at $1 per site per month.

Nearly 10% fewer respondents said that pay-TV and OTT services were not competitive compared with last year – a notable shift, although not in itself suggestive of sudden imminent changes in the pay TV landscape, researchers noted. And meanwhile, interest continues to be fairly high for various multiscreen/connected services; although mobile video and videoconferencing ranked lower than other options.

"The findings from this survey illustrate that there is a willingness by consumers to pay for flexible models for premium video delivery services. In fact, there is more interest in these models for in-home usage rather than mobile," says Kishore, a 15-year veteran of the consumer media industry. "It's fitting that a key theme at this year's TelcoTV is profitable services, as the survey results reinforce the opportunity for broadband network service providers to generate revenue through premium video delivery services."

The survey reveals consumer opinions about video consumption across device platforms, provider perceptions and satisfaction levels with video services, and its results will be revealed in full at TelcoTV, taking place 24 to 26 October at the Las Vegas Hotel. Aditya Kishore, senior analyst at Heavy Reading, will present the findings during his keynote address on 24 October. The presentation will provide fresh data and insight into the selection criteria for pay-TV providers and service bundles, and explore shifts in consumer opinion over the past year. It will also evaluate customer satisfaction levels and drivers, churn drivers and the growing consumption of OTT video via multiple devices.