Finance

Go Figure: PwC Study Says Cord Cutting Slows

84% of consumers say will buy pay TV subscription 12/14/2016 10:49 AM Eastern

The number of consumers who expect to pay for TV rose by a considerable margin in 2016, indicating that the pace of cord cutting and trimming could be slowing, according to a PricewaterhouseCoopers study.

 

In its Videoquake 4.0: Binge, Stream, Repeat – How Video is Changing Forever, PwC interviewed more than 1,200 consumers and found that more claim that they will buy a pay TV subscription this year -- 84% vs. 70% in 2015 – but less than the 91% that answered in the affirmative in 2014.

 

Hidden costs of cutting the cord could be a factor. About 51% of cord trimmers – those that reduced their TV packages to skinny bundles to cut costs -- said they are paying more for TV today than they did last year. Overall, 42% of all US consumers say they are paying more for video content now than last year. At the same time, the number of respondents that say they subscribe to a pay TV service is holding relatively steady – 76% compared to 79% in 2015.

 

PwC believes that streaming services will continue to grow as additions, not replacements, to pay TV packages, based on its analysis. Growing popularity for a new generation of high quality video, along with live TV, is reducing pricing sensitivity and according to PwC, making more content available on more formats could create a climate where pay TV is one among many video services consumers use.

 

Pay TV  companies that have bet big on mobile TV – like AT&T’s DirecTV Now and others – may feel better after reading the survey, which sees mobile viewing emerging as the dominant platform for younger viewers. About 76% of respondents said they watch more video on their mobile devices than last year. Nearly 60% said their smartphone was the primary device to view content, including short-form video, TV shows and, in some cases, full-length films.

 

The mobile numbers rise the younger the viewer – 70% of 18-24-year-olds say their phone is the primary place they view video content and 62% of the same age group report watching TV shows on their mobile device.  But a lot of that viewing is in the home – 80% said they watch videos on mobile devices at home vs. only 52% “on the go,” according to PwC.

 

The research company also identified a new subset of viewers – Super Streamers – or those that stream video at least 12 hours per week. While only representing about 10% of total viewership, Super Streamers could become a key potential audience for both content and platform providers, according to PwC.

 

Super Streamers are more likely to binge watch shows – 54%, compared to 24% overall. About 61% of that group say they are cord cutters, cord nevers or cord trimmers, compared to 39% who say they subscribe to traditional TV.

 

 

 

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