Digitalsmiths Report Shows Growing Cord-Cutting

The State of Cord-Cheaters – Cord-cheating, a phenomenon Digitalsmiths began tracking in Q2 2013, refers to cable/satellite subscribers who also seek video content from OTT services and other third-party services. In Q3 2015, of the respondents who have a Pay-TV provider (see more on page 16):
- 63.1% fall into what Digitalsmiths coined as cord-cheaters.
- 55.1% also use an OTT subscription service.
- 35.3% also use a pay-per-rental service (ex. Redbox Kiosks).
- 27.1% use both categories.

Respondents Rank TV Experiences – Getting viewers to what they want to watch as easily, and quickly as possible should be the #1 goal for any video service provider. With the competition of OTT services, which typically offer next-gen experiences/UIs, Digitalsmiths wanted real consumer feedback on which offerings achieve this goal. Below is how the respondents, who are also Pay-TV subscribers, ranked Linear TV, PVOD, and OTT offerings (page 31 of report):
1. OTT subscription services offer the best experiences, with 78.2% of respondents saying these services make it easy to find something to watch.
2. PVOD catalogs of Pay-TV providers came in second, with 66.0% of respondents stating they find the discovery experience easy.
3. Linear TV falls in third, with 58.2% of respondents answering it is easy to find something to watch on their Pay-TV service.

Millenials vs. Baby Boomers - Comparison of how millennials (ages 23 - 30) and an older generation (61-to-70-year-olds) engage with content discovery functionality. Here is a breakdown of the results (page 31 of report):
- 52.6% of millennial respondents use search functionality when it is available to them, compared to only 37.2% of 61-to-70-year-olds.
- 34.5% of millennial respondents use the recommendations feature, while only 13.3% of 61-to-70-year-olds use recommendations functionality.
- 52.4% of millennial respondents want video recommendations, compared to only 29.3% of 61-to-70-year-olds.

À La Carte Pay-TV Offerings & OTT Skinny Packages – The majority of consumers do not watch many of the channels offered to them; therefore, Digitalsmiths inquired if there was demand for an à la carte Pay-TV package (read on pages 9-10). The results include:
- 76.7% of respondents are interested in an à la carte Pay-TV service where they can select, and pay for, only the channels they want to watch.
- On average, respondents’ ideal á la carte package would consist of 17 to 18 channels.
- On average, the most respondents would pay for their ideal à la carte package was $40.50 a month.

Digitalsmiths Corp.