Joseph O'Halloran ©RapidTVNews | 21-09-2011


The pay-TV market has it wrong on cord-cutting and is ignoring the needs of high-value customers who would actually pay more for compelling content when they like it instead of pulling the plug altogether.

According to a new survey published by Strategy Analytics, contrary to popular belief, cord-cutters are not just legions of the economically challenged; instead they typically place a high value on content, and insists the analyst, three times more likely to report watching paid video on demand (VOD) service than economically- motivated churners.

"The pay-TV industry has gotten it wrong on the topic of cord cutting," asserted Ben Piper, Director of the Strategy Analytics Multiplay Market Dynamics service and author of the report. "For the second consecutive year, our survey research clearly indicates that those who intend to cut the cord are high value, high-revenue customers--not the deadbeats they have been made out to be."

The background to the survey is rather grim: the research choes that collectively, US pay-TV providers lost 400,000 subscribers in the second quarter of 2011, their single worst period in over three years. Strategy Analytics adds that even though much of the subscriber loss can be attributed to deal seeekers, the percentage of those who say they're giving up on pay-TV altogether is not abating.

Moreover, the analyst argues that cord-cutters are motivated less by price, and more by control of content, something that service providers should regard as an opportunity. "40% of cord-cutters—compared to 20% of economic churners—said they would be willing to pay more than they currently do for pay-TV if it meant they could pick and choose content on an à la carte basis," Piper added. "Pay-TV providers should view this as an opportunity to customise and repackage content offerings to this growing segment."