Editor | 04-09-2013
Once, all pay-TV providers needed to worry about was cord-cutting and then cord-shaving, but now, according to analysis form Digitalsmiths, they have to contend with the trend of cord-cheating.
The Digitalsmiths Q2 Video Trends Report defines the cord-cheating phenomenon in terms of those attempts by consumers to seek on-demand content from third-party video services and OTT services — such as Netflix, Redbox Kiosk and Hulu — as an alternative to their pay-TV provider's on-demand offerings.
Digitalsmiths feels this is an enormous threat to pay-TV providers facing competition from all angles, and one that speaks to the need for consumer-facing improvements.
The survey found that just over two-thirds (68%) of smartphone and tablet owners have not downloaded their pay-TV provider's app, with just over a third (35%) subscribing to an OTT service. Just under a quarter (22.1%) regularly used a third-party pay-per-rental service while nearly three-quarters (73.8%) had never made a purchase from their pay-TV provider's VOD catalogue.

The other problem that pay-TV providers face is the fact that their viewers are showing an increasingly lack of engagement with their channels. For the third quarter in a row, the majority of respondents, 78.9%, said they watch ten or fewer channels offered to them while 86.2% said they watch the same channels over and over again. Half of the survey respondents said they would like their channel guide to show what's airing based on their preferences/viewing interests first, a 3% increase over Q1 2013 results. However, when asked if their cable/satellite provider makes recommendations of TV shows and movies, 78.8% of respondents gave a resounding thumbs down.
In a call to action, Digitalsmiths declared that in order for providers to influence consumers outside their normal channels and unlock the full value of the service offering, it is imperative to serve relevant content and ultimately ease the video discovery process. With the cord-cheating phenomenon and new features such as Netflix's personalised recommendations, Digitalsmiths believes that pay-TV providers need to move quickly to implement similar features.