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General News Traditional pay TV under pressure from OTT services: Horowitz report
MUMBAI: A recent report from Horowitz Research’s State of Pay TV, OTT and SVOD reveals that three-quarters (76 per cent) of TV content viewers report subscribing to a traditional pay-TV—cable, satellite, or telco—service, down from 86 per cent in 2014.

According to the study, just 71 per cent of 18-34 year-olds subscribe to a traditional pay-TV service, compared to 75 per cent of 35-49 year-olds and 81 per cent of TV viewers 50+. Although TV viewers are watching more TV content than ever before—the study reveals that TV content viewers report watching an average of 6.5 hours of TV a day—the fact that there are many lower cost services competing for consumers’ video budgets is impacting the perceived cost-benefit ratio of traditional pay-TV.

74 per cent of cable TV subscribers, 78 per cent of satellite TV subscribers, and 80 per cent of fibre TV subscribers say that they are satisfied with their TV service overall. However, when asked how “worth it” the TV services they subscribe to are cable, satellite, and fibre TV subscribers are less likely to say that their TV service is worth it compared to most over-the-top services, reveals the study.

Seventy percent of satellite and fibre subscribers and 62 per cent of cable subscribers say that their service is worth it; between 8-13 per cent say their pay-TV is not worth it. On the other hand, 91 per cent of Netflix subscribers say that Netflix is worth the money, and 83 per cent say that Hulu is worth it. Digital pay-TV providers Sling TV and Hulu with Live TV also fare better than traditional pay-TV, with 79 per cent of Sling TV subscribers and 77 per cent of Hulu with Live TV subscribers saying their service is worth it.

In addition to exploring the value of TV and video services, the study also asked how interested TV viewers would be in either switching to a service such as this from their cable/satellite/fibre service (if they currently had pay-TV service) or subscribing to one (if they did not currently have pay-TV service). Nearly half (48 per cent) of pay-TV subscribers express interest in a dMVPD (digital MVPD); this rises to 58 per cent among 18-34 year-olds.

Horowitz SVP of insights and strategy Adriana Waterston says, “The majority of subscribers to over-the-top services like Netflix, Hulu, and Amazon Prime are also multichannel subscribers; a smaller percent of them are cord-cutters and cord-nevers. Those services are essentially VoD ‘on steroids,’ and they have tended to supplement, rather than cannibalise, the services offered by traditional providers.”

While these data are based on a broad, general description of dMVPDs and may not translate into actual cord-cutting, they do indicate a willingness among consumers to explore these services, and cost plays a major role. Nearly all of those interested in dMVPDs cite the lower cost as a key factor why they are interested in a dMVPD. Beyond cost, the viewing and technology experience that consumers have come to expect from over-the-top services is highly valued and, in many cases, more user-friendly than many traditional MVPDs’ set-top box guides.

Waterson concludes, “The new dMVPDs do compete directly with traditional providers by offering linear television, including sports and local channels in many markets, DVR service, and other elements of traditional multichannel, but for a lower price and with the app-driven, consumer-friendly OTT experience that has transformed consumers’ expectations about how and where they can access their content. It is incumbent on traditional players to continue to assert their value proposition at the same time as they pivot their businesses to serve consumers’ evolving expectations.”

Airtel Digital HD Recorder / Kerala Vision Digital TV
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