Would Consumers Save Money With A-La-Carte TV Packages?

March 30, 2017

This article is included in these additional categories:

Broadcast & Cable | Media & Entertainment | Pay-TV & Cord-Cutting | TV Audiences & Consumption | Video

There’s been a lot of buzz in recent years about à-la-carte packages, where consumers can choose their own channels. This is based on cost concerns with current pay-TV packages along with research indicating that viewers watch only a small fraction of the channels available to them. But would consumers actually save much money by building their own packages? A new study from Hub Entertainment Research provides some insight.

The study is based on a survey of 1,502 consumers ages 16-74 who watch at least 5 hours of TV per week and have broadband at home. Respondents – given several different types of packages –
chose a pure à-la-carte as their preferred approach. They were then asked to build their preferred package from a list of 77 TV content brands without considering price, and then with hypothetical prices included. These prices ranged from $4-7 for broadcast and basic cable networks to $8-10 for premium networks, $10-15 for subscription video-on-demand (SVOD) services (such as Netflix) and $20-25 for sports networks.

Highlights of the results follow.

  • With price not being a consideration, respondents chose 19 channels on average in their bundle, with ABC (63%), CBS (61%) and FOX (61%) their most commonly chosen channels. Netflix was the 5th-most popular, selected by 58% of respondents. Notably, roughly two-thirds (68%) of all respondents selected at least one SVOD as part of their bundle.
  • With approximate prices attached to networks, the average number of chosen networks dropped by half, from 19 to 9. Netflix jumped to the top spot in the popularity stakes, chosen by 38% of respondents. Perhaps most interestingly, with these hypothetical prices attached to the networks, the average bundle carried a monthly fee of $66.

That $66 is a very interesting figure. While it may not be definitive, it offers at the least a benchmark of some sort to compare with current prices.

For those, we’re consulting the latest quarterly video trends report from TiVo (which, by the way, also found the broadcast networks to be the most popular choices for à-la-carte packages when price was not a consideration).

In the latest quarterly report, more than 3,000 US and Canadian adults were asked how much their monthly bill is for TV services only. A majority (55.5%) pegged their bill at more than $75, including more than one-third (34.8%) spending upwards of $100 per month.

While an average was not computed from the different ranges, it seems as though respondents to that study are paying somewhere around $100 per month for TV services only.

So the short answer to the headline question? Yes, it seems as though consumers would save some money if they chose their own channels. (Obligatory disclaimer: comparing different surveys with different samples is a very imperfect science.) It wouldn’t seem to be drastic cut in cost, but a savings of around a third or so is certainly not something to sneeze at…


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