For the fifth consecutive year, we’re digging into the evolution of America’s relationship with video.
In 2017, despite a continued decline in traditional Pay TV subscriptions, we’re also seeing some signs of trouble in the new order.
We've done extensive research to learn more about what consumers want from the growing number of video-consumption options.
Methodology: In October 2017, PwC surveyed a sample of 1,986 Americans, ages 18 to 59, with annual household incomes above $40,000. We analyzed our results against similar studies we conducted in fall 2016, 2015, 2014 and 2013, and also added new topics to explore for 2017. Additionally, we conducted two consumer focus groups in New York.
of our respondents subscribe to Pay TV, down from 76% last year and 79% the year before. The number of those trimming their Pay TV subscriptions is also growing.
of respondents also subscribe to Netflix, meaning the same number of people who subscribe to Pay TV also subscribe to the service.
of sports fans would end or trim their Pay TV subscription if they no longer needed it to access live sports.
of consumers say they can’t handle using more than four services in addition to Pay TV.
The number of traditional Pay TV subscribers continues to drop as more people are trimming or cutting the cord completely.
73% of our respondents subscribe to Pay TV, which is down from 76% last year and 79% the year before.
At the same time, people report they’re paying more for video today than they were last year.
53% of cord trimmers report paying more for their services in 2017 than they did in 2016; however, trimmers are still paying less than traditional subscribers overall.
Costs continue to rise because, with more options than ever, viewers are diversifying what they watch and using multiple services to consume content.
Streaming is up among all age groups.
Consumers are showing signs of being overwhelmed.
While respondents indicate they have four services on average—including Pay TV and digital services—they only watch about two of those services on a regular basis.
Just a quarter of consumers say they can handle using more than four services in addition to Pay TV.
Looking for content only adds to the burden—a notion we analyze in depth in our sister Consumer Intelligence Series publication on content discovery.
*Due to heightened levels of password sharing, we report on access to a service rather than subscription to a service
“When I want to watch something but I don’t know what I want to watch, [I like] having that flexibility to turn on the TV and discover something new or just watch a rerun.”
Additionally, having too many options might mean limited growth for incumbents and new entrants alike—the #1 reason for ending a subscription is “I didn’t use it enough” (29%).
With all the energy and resources required to keep up with subscriptions and content, appreciation for the ease of Pay TV grows.
Pay TV solves many of the issues that surround streaming, creating a relaxed and efficient viewing process.
Pay TV spin-offs that can provide viewers with the best of both worlds are poised for success.
Exclusive content—including original content—is a key component of creating a successful streaming service, but it’s not enough.
In fact, exclusive or original content might draw consumers to free trials or temporary subscriptions, but won’t necessarily garner loyalty. Services that focus on long-term brand building alongside content development can avoid situations like this.
Viewers are most eager to watch—and pay for—a streaming service from a brand that already has an established presence with unique content. This reinforces the idea that powerful branding can drive success in a sea of clutter.
But with respondents so eager for premium streaming services from brands like the NFL, the evolution of live streaming in sports might mean an even more precipitous decline in Pay TV subscriptions.
There are significant opportunities to engage sports fans outside of the traditional Pay TV format.
The social nature of live sports and the growth of entertainment options like fantasy sports make it particularly ripe for deepening relationships with viewers.
Even beyond sports, there is a significant opportunity for brands to engage viewers through video as second screen usage grows.
But advertising needs to be less burdensome, more engaging and more relevant.
Focus group respondents say that many streaming services show “the same commercial over and over,” and it’s “annoying;” they also prefer longer ads up front, with fewer interruptions throughout.
Only 40% of respondents believe that advertising on streaming services is much more relevant to them than ads on TV.
For companies to thrive in this accelerating video space, there are a few key points to keep in mind.
Technology, Media and Telecommunications Advisory Leader, PwC US
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