“Cord-thinning” bigger threat to pay-TV than cord-cutting

Joseph O'Halloran | 10-10-2012

The broadcast industry is never at a loss to invent new phrases but the concept of cord-thinning may actually be something a lot more threatening to the industry new research is suggesting.
Based on a survey of over 2000 pay-TV subscribers in North America, the Digitalsmiths Q4 2012 Video Discovery Trends Report: Consumer Behaviour Across Pay-TV, VOD, OTT and Next-Gen Features,revealed that pay-TV providers have no choice but to invest in new technology to improve the discovery and viewing experience in order to keep existing subscribers and save their “on-the-fence” subscribers.

Even though the data showed that over the top (OTT) offerings aren’t at present an enormous threat, with two thirds (65%) not using them at all, the analysts warned that providers needed to keep a close eye on the services being offered, and understand why and how consumers use those services. At present h 81% were satisfied or very satisfied about the value received from their pay-TV provider but 38% indicated that they were potentially ready to make changes in the next six months.
Around two-thirds of respondents (68%) have not yet changed the level of their service over the last year with 17% actually increasing what they have. Two-thirds of the remainder who did cut back axed premium channels from their bouquets.
As an indicator of the questions that consumers are asking themselves about relatively expensive premium channels, the survey found that over half of consumers surveyed spent over 10 minutes a day channel surfing, and almost a quarter spent over 20 minutes. In these 20 minutes, the survey found that the consumer does not enjoy his or her pay-TV service or engage with content and/or advertising. The bulk of consumers were found to have also watched the same 4-8 channels out of the hundreds for which they pay, which, says Digitalsmiths, negatively impacts the consumer’s perceived value of their pay-TV service.
Digitalsmiths said that another surprising survey result was that over half of respondents spent less than a tenth of their TV viewing time watching recorded/DVR’d content. The analyst draws the conclusion that most consumers channel surf or scroll through the guide in order to find something to watch when they turn on the TV. Therefore, pay-TV providers have a huge opportunity to influence the decisions of their subscribers.
What this means say the analyst is that providers need to improve the video discovery experience as by delivering a better discovery experience, pay-TV providers will decrease the amount of time spent channel surfing and increase the consumer-time spent engaged with the content and help viewers re-discover the value of pay-TV services, resulting in improved satisfaction levels.