Dimitar Serafimov| Thu Mar 22 2018 CET| Industry insights
As the battle of the box continues, fresh trends, technologies, and innovations are emerging with the passing of each day – well, almost. On this occasion, we’re focusing on pay-TV or to be more precise, the struggles of pay-TV providers.
Now, despite US pay-TV revenues reaching a monumental peak of $101.71 billion in 2015, a sizable $26.58 billion – or 26% – decline is forecast between the end of 2015 and 2023 to reduce the total to $75.13 billion.
The impact of cord-cutting due to increased demand for robust, flexible SVoD and OTT services, coupled with a trend in pay-TV customers turning to the ‘skinny bundle’ – with consumers flocking to the likes of net-driven platforms such as DirecTV and Sling – has caused a significant decline in subscribers. 1.5 million, to be precise.
It seems that the order of the day is the online subscription service and as pay-TV providers fail to meet the needs of today’s consumer both in terms of value and flexibility, further declines may be on the horizon.
In fact, to fill the gap, direct-to-consumer video offerings will help drive total DTC subscriptions close to 50 million by 2022.
And to illustrate the point, this graph from the new TiVo “Q4 2017 Online Video and Pay-TV Trends Report” outlines the primary reasons for people turning away from pay-TV services:
As you can see, in recent times especially, rising, unaffordable fees closely followed by a poor user experience and substandard customer support are the key indicators for satisfaction concerning today’s pay-TV services.
What’s more, according to the same study, 87% of cord-cutters state the high price point of pay-TV as the chief reason for canceling their subscriptions.
It’s clear that increasingly, traditional pay-TV providers are unable to provide the level of service or value for money that online-based, direct-to-consumer services can – and unless these businesses make clear efforts to adapt their business models to the modern world, they could be completely extinct in the not so distant future.
Some will fail and some will prevail, sparking up exciting new relationships with contemporary providers – and as 2018 rolls on, the winners and losers of the declining pay-TV will fast become apparent.
Find out why diving into OTT can maximize broadcasting returns: