Kissing Cousins: Broadband & Pay TV
Got broadband? Then chances are you pay for TV service too.
According to The Diffusion Group, 88% of American adults with broadband at home also subscribe to cable, telecom, or satellite TV service. The numbers are higher among older cohorts, while younger adults are notably less likely to pay for television. However, even consumers in the group with the lowest uptake numbers -- adults between ages 25 and 34 -- still purchase TV service at a rate of 81.9%.
Cable operators have watched their video subs slide for years, but consumers have largely migrated to competitive services rather than abandon pay TV for over-the-top (OTT) video altogether. The big question is whether the lower rate of subscription in younger audiences is a sign that they're less interested in pay TV or just at a stage of life where TV service is less relevant or too costly.
Whatever the reason for the age-related trends, service providers are actively working to draw in younger audiences. In addition to multi-screen video delivery, cable operators are also experimenting with new service models.
Cox Communications Inc. trialed an innovative IP video service with Fanhattan LLC 's Fan TV in 2013 and reportedly has another virtual cable service under development. Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC), meanwhile, have introduced lower-cost services that combine Internet delivery with a smaller lineup of TV channels and added access to premium content from Home Box Office Inc. (HBO) . (See Cox Eyes IPTV Service .)
There is also renewed interest among service providers in pursuing the university market. Philo (formerly Tivli) -- a startup that enjoys backing from high-profile investors such as Mark Cuban -- has successfully signed up several schools for its college-specific IP video platform.
Comcast has also introduced an Xfinity on Campus service. That offering launched first at Boston's Emerson College and will reportedly take off next at Drexel University. (See also Tales of Tivli: Taking TVE to School.)
There's a theory here. Hook consumers while they're young. That may be the best way to keep subscription numbers high across a lifetime.
— Mari Silbey, special to Light Reading