Broadband-only viewers have fewer TV services, pay three-times less for them, and more are satisfied with them versus pay TV subscribers. However, when it comes to canceling, it is still all about price!
TiVo’s Q1 Video Trends Report reveals some of the underlying dynamics of the North American market for TV services. The data was gathered from 4,367 U.S. and Canadian adults during the first quarter of 2020. As such, it includes some of the impacts of the C-19 pandemic. However, it also points out some longer-term trends.
Multiple TV services are the norm
The first thing to note from the data is how many TV services people are using. Those with a pay TV subscription use an average of 6.9 services, while broadband-only subscribers use 4.9. Last week, nScreenMedia reported the comScore finding that on average people were using four services. However, the comScore number is only for pay services. TiVo’s findings reflect the usage of pay TV, free-to-air, SVOD, and AVOD services.
Dumping pay TV saves broadband-only viewers $85
There is a massive difference between the amount pay TV and broadband-only customers spend on TV services. What is more, the difference is not explained away by the higher service usage of pay TV subscribers. TiVo says the average survey respondent with pay TV spends $129 a month on video services. Broadband-only customers spend $44 a month.
Perhaps the considerable difference in monthly spending is because pay TV subscribers like more services. After all, TiVo says they use two more services than broadband-only viewers. However, one of those services is, of course, pay TV. Moreover, that one service accounts for all of the spending difference between pay TV and broadband-only subscribers. The average video revenue per unit (subscriber) Comcast earned in the first quarter was just over $90 per month.
More services do not necessarily mean happier viewers
If pay TV subscribers have access to more content, does this make them more satisfied? The TiVo data says no. 6% more of broadband-only subscribers say they are satisfied or very satisfied with their service versus pay TV customers. That is not to say, pay TV users are unhappy, far from it. Nearly two-thirds say they are at least satisfied with their video services.
Price is pay TV’s biggest problem
Part of the difference between pay TV and broadband-only subscriber satisfaction could be the price of the services. For many years, pay TV subscribers have cited cost as a primary reason for getting rid of the service. In the last year, the price problem has gotten much worse. Of those that have cut their pay TV service in the previous six months, 92% cite price as the main reason. Last year, 85% said the same thing. The second most important reason -with 23%- was relying on only streaming services.
To be sure, price is also the number one issue with those leaving an SVOD service. 53% of broadband-only customers that had cut a service in the last six months cite cost as the reason. However, engagement is almost as important. 43% say they were no longer watching anything on the service.
Ironically, it could be SVOD that is suffering more from pay TV’s high prices. TiVo says that 11% of broadband-only users reported canceling an SVOD service in the previous six months. However, 22% of pay TV customers said they had cut an SVOD service in the same timeframe.
Why it matters
Compared to pay TV subscribers, broadband-only viewers in North America:
- Have fewer TV services
- Pay one-third as much for their video services
- More of them are satisfied with their service.
When people cancel both types of service, they cite cost as the primary reason.
However, the lack of interest in the content is almost as significant as the price for SVOD cancelers.