Pay-TV Subs Aren't Buying Into VoD
Pay-TV providers have made enormous strides with video on demand in recent years, but that doesn't mean consumers are willing to pony up the cash for VoD titles that aren't free. In the latest survey results from the Digitalsmiths Corp. "Video Discovery Trends Report," a whopping 72.9% of respondents reported that they never purchase content from the VoD menu. In contrast, 41.7% pay a monthly fee to Netflix for on-demand content, and 48.2% say they use some kind of subscription over-the-top service.
The good news for pay-TV providers is that subscribers appear much more likely to supplement their monthly TV bill with an OTT service rather than rely on the web for everything. The bad news, however, is that providers are still losing revenue to competitors on the VoD front. Digitalsmiths calls the consumer behavior "cord-cheating," and says the trend continues to grow.
Viewers cite several reasons for using OTT services. The top ones include convenience (60.1%), cost (48.3%), and the "ability to watch certain TV shows and whole seasons" (42.6%). On that last point, the cable industry is trying to fix its own back-catalog problem. Programmers want revenue from the ads that run in VoD shows outside the C3 window. If Comcast Corp. (Nasdaq: CMCSA, CMCSK) and The Nielsen Co. can solve that problem -- as they're currently attempting to do -- providers will be much more likely to include whole seasons of shows in their VoD guides. (See Comcast Seeks VoD Killer App.)
The latest quarterly report from Digitalsmiths is chock-full of other statistics on pay-TV viewing habits. Of note, only 19.6% of respondents said they have a pay-TV provider's TV Everywhere app on a mobile device. Also, almost nobody surveyed reported using a specific social TV app. However, 30.8% said they choose to watch TV and movie content based on social media buzz.
— Mari Silbey, special to Light Reading Cable