Pay-TV uptake remains resilient

Joseph O'Halloran | 16-01-2014

More evidence, this time from The Diffusion Group, has emerged to show the strength of the pay-TV industry, with nearly nine in ten adult broadband users in the US subscribing to cable, satellite or telco services.

In its TV Viewing in the Age of Quantum Video report, TDG dismisses any notion of cord-cutting, never mind what it calls “a mass exodus” from incumbent pay-TV services to online substitutes. It stresses that the 88% rate of adult broadband users subscribing to an incumbent pay-TV service has held relatively steady for the last 12 months.

However, the analyst did note specific differences in subscription rates by age, with legacy pay-TV subscription rates among early Millennials (ages 25-34) at a level of 82%, compared with 85% among late Millennials (ages 18-24). In both cases, this is notably lower than use among those 35 and older.

"Millennials are quantum consumers raised in a world where online, on-demand video sources came of age, so we would expect uptake of legacy services to be a bit lower," commented Michael Greeson, co-founder of TDG and director of research. “That said, until a legitimate virtual operator emerges capable of offering a competitive alternative to traditional pay-TV services, most Millennials will continue to subscribe to a legacy service."

Summing up, TDG cautions pay-TV operators that it is imperative that they execute on their promises to deliver the types of video experiences desired by younger consumers. It adds that they must also find creative ways to balance evolving needs with inevitable price increases due to the accelerating value of quality video content.