Finance

Analyst: At-Risk Cord Cutters Just Want Cheaper TV

Viewers Want Thick Packages, Skinny Pricing 4/24/2015 6:00 PM Eastern

In his third focus group centered on at-risk cord-cutters, or young viewers that are considering dropping their pay TV subscriptions, Sanford Bernstein media analyst Todd Juenger found that participants in his informal study didn’t necessarily want to give up any channels, they just want what they are currently getting to be cheaper.

 

Juenger’s latest group consisted of seven men and eight women aged 22 to 38 in Chicago and Boston – obviously not a huge sample but large enough to get some interesting insights. As with the past two groups (in New York and San Francisco), the latest panel showed no actual desire to cut their pay TV cord and the growing list of OTT skinny bundles holds almost no appeal.

 

 Juenger held the focus groups before Verizon introduced its Custom TV package, which offers 35 base channels and the ability to choose two of seven channel packs based on genre, for $54.99 per month. Additional packs are available for an addition $10 per month.

 

But the analyst said that based on conversations with the participants based on other offerings like Sling TV and a fictional “fantasy bundle” of any 10 channels they wanted for $20 per month, he has a good idea of how attractive they would be. According to Juenger, the channels selected by the participants for their “fantasy bundle” would move across 4 to 6 of the available Custom TV Packs, costing between $65 and $85 per month. At that price, Juenger wrote the participants were better off sticking with their existing pay TV package.    

 

Just like in the other focus groups, the Chicago and Boston participants said they only watched a handful of channels, but placed a high value on choice. For them, when actually forced to consider cutting the cord, they all came up with excuses not to.

 

“After all these focus groups, we think we figured out what consumers really want. What they really want is to pay less for the TV service they currently have,” Juenger wrote. “They think they'd like to stop paying for channels they don't care about, but they aren't willing to give up the ones they do care about, and they do place meaningful "option value" on having lots of choices.”

 

Want to read more stories like this?
Get our Free Newsletter Here!