Pay-TV cord-cutting has been a much-discussed issue in recent years, despite some indications that it might be overblown. Nevertheless, there’s no denying that cord-cutting is occurring and that it’s a concern for pay-TV providers battling against low customer satisfaction rates. A new study from Digitalsmiths points to some of the motivations for cord-cutting and how providers can stem the tide.
The quarterly survey, conducted among more than 3,000 US and Canadian consumers, finds that roughly 82% of respondents have a pay-TV provider, in line with other estimates. Among those without, almost 1 in 5 (18%) reported having cut their service in the prior 12 months.
The most common reason for having cut the cord, per this group, is price: 83% said that it was too expensive. Not too far behind was the influence of OTT services, with roughly 6 in 10 saying they cut off their service because they use an internet streaming service such as Netflix or Amazon Video.
This suggests that streaming services are having an impact on pay-TV subscriber decisions, as they do on the decision to not subscribe to pay-TV in the first place. Still, with streaming services now reaching at least half of US homes, it appears that only a small proportion of respondents are cutting the cord specifically due to the availability of these services. (Remember that this question in the Digitalsmiths survey was only fielded among the small portion of respondents who cut the cord in the prior 12 months.)
It stands to reason, though, that addressing cost concerns and OTT offerings could help reduce pay-TV subscriber churn. And separate results from the Digitalsmiths study demonstrate that this is indeed the case. The report examined a subset of respondents who plan to change, switch or cut pay-TV providers in the next 6 months, asking them if they would consider keeping their existing provider should some options be given to them.
Almost 2 in 3 said they would consider keeping their provider if they were able to choose and pay for only the channels they typically watch. This echoes other results indicating that almost 8 in 10 respondents overall would like to choose only the channels they want to watch. Further, it’s worth noting that more than 8 in 10 respondents overall say they typically watch 10 or fewer channels. With broadcast channels such as ABC, CBS and NBC being the channels that US respondents would most be interested in including in an à-la-carte package, Digitalsmiths calculates that the total price for the 10 most popular channels would be $15.30. It’s a crude comparison, but fewer than 1 in 6 respondents said that they spend less than $50 currently per month for only their TV services.
Aside from offering à-la-carte options, pay-TV providers could also potentially reduce churn by allowing customers to combine all of their TV providers (such as Netflix, Hulu, Amazon Video) into one place so that viewers can find something to watch, regardless of the service. More than 4 in 10 respondents who plan to cut ties with their provider said they would consider sticking with them were this option available.
Finally, about 1 in 6 at-risk subscribers would consider keeping their provider if it made it easier to find something to watch on TV. This aligns with previous research from Digitalsmiths, which found TV viewers saying that OTT-like interfaces could stem cord-cutting. As of this latest quarterly study, just 58% of respondents said they feel it is easy to find something they “want” to watch on TV, so there’s plenty of room for improvement there.
Still, it seems as though price is the largest obstacle. Viewers are almost as likely to be unsatisfied (21%) as very satisfied (24%) with the level of value they’re receiving from their cable/satellite service provider. The top complaint among those unsatisfied? That it’s too expensive, or that fees have increased for service.
About the Data: The survey was conducted in the US and Canada among 3,140 adults aged 18 and older.