Video ecosystem at inflection point as peak TV era faces end
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| 11 July 2023
As service providers face substantial headwinds which may constrain subscriber growth, large numbers of consumers are either at or near their maximum number of TV sources and are not actively looking to spend more money on video entertainment says a study from Hub Research.
Hub res 11july2023
Hub’s annual Monetisation of Video survey report, based on a survey conducted among 1,602 US consumers with broadband, age 16-74, who watch at least 1 hour of TV per week. Interviews were conducted in June 2023 and explored consumers’ attitudes toward what they pay for TV services, and the value delivered by providers.

The research found that nearly half of those surveyed are already at what they claim is their maximum, averaging seven TV sources. And among the third of viewers who have not yet reached their limit, seven is also the optimal number of services.

The more subscriptions a household has, the more likely they were to cancel a new subscription within six months of acquiring it. The majority of those with 4 or more subscriptions say they cancelled a new service within six months. Yet the good news was that consumers were still spending more: Nearly half of consumers (44%) say they are spending more on TV than a year ago, up from 34% who said the same in 2020. This was despite the fact their actual average spend of $85 per month is 25% more than what they consider “reasonable” for video services.

Another key finding was that consumers were looking for value. While low price was the strongest driver of the value of a particular video service, it is not the only thing consumers include when considering value. They also want price stability, and for a service to have a large library of content.

Among the substantial segment of consumers who do not have a traditional pay-TV/ multichannel video programming distributor subscription, two thirds said integrating subscription video-on-demand (SVODs) into an MVPD set-top-box would make a pay-TV service more valuable to them, up from 59% in 2022. Hub observed that in an environment characterised by subscription churn, such bundles could serve to reduce cancellations.

“Gone are the days when providers could reliably count on revenue growth from new subscribers,” said Mark Loughney, senior consultant to Hub commenting on the research. “This leads to a quandary: how to deliver the volume of content necessary to keep subscribers loyal, while at the same time controlling production costs. Reconciling this dilemma will be the key to long term success in the video marketplace.”


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