Cost the key to cord-cutting and pay-TV dissatisfaction
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Editor
| 14 March 2018

‘It’s the economy, stupid’ has long been a political mantra and could also be applied to cord-cutting as the 20th edition of TiVo’s quarterly Video Trends Report has revealed.

Based on a survey of more than 3,300 consumers, TiVo’s Q4 2017 Online Video and Pay-TV Trends Report showed that the high cost of cable/satellite service continues to be a prominent topic when surveying respondents on their pay-TV service and that unsurprisingly price was the top reason cord-cutters cancelled pay-TV service, and the number one reason for dissatisfaction among pay-TV subscribers.

For those who had cut their pay-TV service, 86.7% of these respondents cancelled service because of its high price. This price dissatisfaction had increased 6.6% year-on-year and was at its highest rate since Q3 2016. For respondents who were unsatisfied with their pay-TV service, 83.1% regarded the main reason as “too expensive/Increasing fees for cable/satellite services.”

While lowering prices was not seen as a realistic option, the report highlighted other ways pay-TV providers can demonstrate the value of their offerings, as well as differentiate themselves from vMVPDs and their skinny bundle offerings. Indeed the study found that vMVPDs seemed to have found the pricing sweet spot for entry-level offerings. The average price US respondents want to pay for a package of self-selected channels wad $35.87 per month, which is in line with the actual prices of DirecTV NOW, Sling TV and YouTube TV.

Another key trend emerging was that respondents’ ownership of both smart speakers and streaming devices was at an all-time high. While smart speaker manufacturers haven’t yet focused on seamlessly integrating live TV into its product, TiVo was confident this functionality is on the horizon. It added that pay-TV providers must prepare for the battle over the living room. The company questioned as to when a user presented a query to a smart speaker, would the device recommend its own manufacturer’s content, or would it suggest the user’s pay-TV content.

According to Q4 2017 survey results, the Amazon Echo and Dot together have 57% market share. Also, the Amazon Fire TV Stick, with 14% market share, experienced the greatest percentage growth in the streaming device category with increases of 5.0 percentage points q/q and 5.8 points y/y. TiVo said that when you pair this with the fact that 63.9% of all smart speakers are in respondents’ living rooms, and it became evident that pay-TV providers who don’t quickly lay claim to voice-enabled video experiences risk losing their connection with the viewer and their presence in the living room.

TiVo also found that as 2017 progressed, sports streaming grew in popularity, and that 28.2% of respondents had streamed a sporting event. According to respondents, the most popular sites for streaming sports are Facebook, Amazon and NFL.com. Those who watched sports four hours or more a were more likely than those who watch zero to two hours a day to “always” be frustrated when trying to find sports content do the following (77.9%); more likely to stream sports online (111.9%); more likely to check sports scores on a smart speaker (191.1%). Analysing its results in this sector, TiVo warned broadcast networks to be concerned that the data smart speaker manufacturers can now gather from people checking sports scores as well as the targeted marketing it enables.

This quarter’s results also showed the largest positive jump in respondents’ sentiments toward their ability to find something to watch on their pay-TV service. With the many competing offerings available today, this, said TiVo, was positive news for pay-TV providers. Almost 70% of respondents felt it was easy to find something to watch through their pay-TV service, and these overall satisfaction levels increased 11.1 percentage points y/y and 11.9 points over two years. In terms of SVOD content discovery, 85% of respondents were pleased with their ability to find something to watch on their SVOD service, an increase of 3.8 percentage points y/y and 5 points over two years.