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ericsson-tv-subscription-changes-sept2012.png21% of American pay TV subscribers say they either reduced (14%) or eliminated (7%) their pay TV subscriptions in the past year, according to [pdf] results from an online survey released in August by the Ericsson ConsumerLab. This compares to 12% who report having increased their spending on pay TV. The remaining two-thirds have not changed their pay TV spending.

Reports regarding cord-cutting and cord-shaving have shown varied estimates of late. Survey results from Chadwick Martin Bailey released in March found 16% of paid TV subscribers who have high-speed internet access saying they are highly likely to cut back on cable in the next year (“cord-shaving”). A Deloitte study from January indicated that 11% of respondents to be considering cutting the cord to focus on watching their favorite content online, although an April 2012 report from Convergence Consulting suggested that 2.6% of US TV subscribers, or 2.65 million subscribers, cut the cord between 2008 and 2011 to rely solely on online, Netflix, and other sources. Differences in study methodology may contribute to these variances: for example, the Ericsson online survey may skew higher for cord-cutters and cord-shavers, as these online adults may be more willing to trade their pay TV subscriptions for online content than the average American.

Chinese Spending More on TV Subscriptions

Details from Ericsson’s “TV and Video: An analysis of evolving consumer habits” indicates that an average of 22% of respondents from 12 countries across the world report having increased their pay TV subscriptions in the past year. By comparison, 8% have reduced their spending, and another 7% have eliminated their subscription entirely.

Some 38% of Chinese respondents reported increasing their pay TV subscriptions, the highest proportion among the 12 markets. A significant proportion of respondents in Chile (37%) and Brazil (35%) also report higher spending on their subscription packages. Just 10% of Chinese respondents have reduced or entirely cut their spending, the lowest percentage among the studied markets.

Cost Savings The Prime Motivator

Asked their reasons for reducing spending, cord shavers and cutters reported that they wanted to save money (56%), were not watching enough TV (42%), used free internet services (16%), or found no suitable package (12%).

These numbers validate data released earlier this year. Recent research from GfK Media reveals that among those who have cancelled their pay TV service, more than 7 in 10 said that cost was their prime motivator for cord-cutting, with online options cited as the reason by less than 1 in 5. A TechBargains.com survey released in July also found that 83% of US cord cutters did so for cost savings, and only 17% reported that cable and satellite did not offer the best quality and variety of content.

Timeshifting, On Demand Most Valued Services

When Ericsson ConsumerLabs asked a subset of consumers (from the US, UK, Germany, Spain, Sweden, China and Taiwan) which services were worth paying for, the largest proportion chose on-demand and time-shifted programming, a significant gain from last year, when this was not among the top 3 most-valued services.

Consumers also appear to value HD quality, with 41% considering this worth paying for. Other valuable services include theatrical releases direct on TV, and extreme quality (like 4xHD, 4K).

Other Findings:

  • 62% of consumers on average use social media while watching TV, up 18% points over 2011.
  • 60% of consumers watch video on-demand on a weekly basis.

About The Data: The Ericsson ConsumerLab data is based on 12,000 online interviews (1,000 per country ) in the US, UK, China, Spain, Sweden, Brazil, Taiwan, South Korea, Germany, Mexico, Chile, and Italy.

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