Park Associates' report, 360 View: Entertainment Services in U.S. Broadband Households found that around one-fourth of subscribers of pay-TV services in US broadband households made changes to their subscriptions in the past 12 months, with service downgrades (11%) outdoing service upgrades (9%).
The findings allude to the impact of high speed broadband on consumer TV habits and preferences. With broadband, consumers have an infinite choice of TV services from OTT video and OTT TV applications that allow streaming, downloading and purchasing of various video content as and when they want, at a fraction of the cost typically paid on traditional cable, satellite or IPTV services.
According to Park Associates, among households with broadband, Pay-TV penetration came down slightly from 87% in the third quarter of 2011 to 85% in the second quarter of this year. 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.
As for home broadband services, Park Associates reported a greater interest in consumers to upgrade their service (10%) than downgrade (4%) over the next year, confirming the general trend on increasing dependence on broadband connectivity for a wide range of information and entertainment content as well as for communication needs. Park Associates also found that over the past 12 months, 13% of broadband households received a higher speed broadband service from their provider without paying a higher price, and speed was cited as the reason by one-quarter of users who switched service providers.
Brett Sappington, Director of Research, Parks Associates
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. It the same time, a notable portion of consumers are upgrading their pay-TV services to higher tiers or premium features.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.
