One-quarter of pay-TV subscribers made changes to their service over the past 12 months, according to Parks Associates.
Roughly one-fourth of pay-TV subscribers in US broadband households made changes to their pay-TV service over the past 12 months, although upgrades were nearly as significant as downgrades. 360 View: Entertainment Services in US Broadband Households, which analyses trends among US consumers in broadband and pay-TV adoption, finds that 11% of pay-TV subscribers downgraded services and 9% upgraded services over the past 12 months.
“Some consumers are definitely looking for ways to cut costs. With the hype around new OTT video services, people are considering their options in video services,” said Brett Sappington, Director of Research, Parks Associates.
“At the same time, a notable portion of consumers are upgrading their pay-TV services to higher tiers or premium features.”
Pay-TV penetration has eroded slightly over the past few years among households with broadband, dropping from 87% in Q3 2011 to 85% in Q2 2015. The percentage of consumers who have never subscribed to a pay-TV service has held steady since 2012. In the second quarter of 2015, 4% of pay-TV users subscribed for the first time, and 8% switched to a new TV service provider.
“Pay-TV adoption rates posted a small decline over the past four years. The recent heightened anxiety about cord cutting and cord shaving centers upon worries that this shift is impacting overall pay-TV revenues,” Sappington said. “The overall volume of video consumed across platforms is as high today as it has ever been. As that consumption shifts to new devices and new content sources, revenues will inevitably shift as well.”
In contrast to pay-TV services, broadband services are seeing a greater interest in consumer upgrades than in downgrades. While 10% of broadband households intend to upgrade to a faster broadband speed, only 4% plan to downgrade in order to save money. Over the past 12 months, 13% of broadband households received a higher speed broadband service from their provider without paying a higher price. One-quarter of those switching service providers did so in order to obtain a faster service at a comparable price.