In 2017, despite a continued decline in traditional Pay TV subscriptions, there are “some signs of trouble in the new order.”
What does that mean? According to a new study from PwC, consumers may have maxed out on the number of over-the-top (OTT) services they can realistically pay for.
The report, “I Stream, you stream—Winning in a video world,” takes a close look at a survey PwC conducted in October 2017 of 1,986 adults aged 18 to 59, with annual household incomes above $40,000.
PwC analyzed its results against similar studies conducted in Fall 2016, Fall 2015, Fall 2014, and Fall 2013. Additionally, two consumer focus groups in New York were conducted.
While “cord-cutting” shows no sign of ebbing, presenting more challenging news to MVPDs, the biggest takeaway from PwC is perhaps the following: Despite growth, streaming is showing signs “of unrest.”
PwC notes, “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.”
Additionally, just 25% of consumers say they can handle using more than four services in addition to Pay TV.
“Looking for content only adds to the burden,” PwC adds.
Additionally, having too many options might mean limited growth for incumbents and new entrants alike.
As found by PwC, the top reason for ending a subscription is “I didn’t use it enough,” with 29% of respondents offering this statement.
“With all the energy and resources required to keep up with subscriptions and content, appreciation for the ease of Pay TV grows,” PwC says, suggesting that cord-cutting may be reaching its apex.
“Pay TV solves many of the issues that surround streaming, creating a relaxed and efficient viewing process,” PwC notes. “Pay TV spin-offs that can provide viewers with the best of both worlds are poised for success.”
PwC featured a comment from a male focus group participant in New York, aged 32. He said, “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.”
STRONG BRANDING TRUMPS CLUTTER
In a sea of clutter, powerful branding is key. Thus, PwC concludes, “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, PwC adds.
“Services that focus on long-term brand building alongside content development can avoid situations like this,” says PwC. “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.”
To view the PwC report in its entirety, please click here.
