By Adam R Jacobson
RBR + TVBR
MIAMI BEACH, FLA. — As individuals aggressively pitch their reality shows and broadcast TV executives discuss ways to develop and distribute their own content — due to a perceived lack of anything but daytime fare — at NATPE 2017, new research from Dallas-based Parks Associates finds that good old-fashioned over-the-air television viewing is on the rise.
This indicates that local broadcast TV is alive and well, and is perhaps to benefit at the expense of pay-TV channels from the rise in Over-The-Top (OTT) use and the “cord-cutting” seen across the U.S.
As noted in Parks’ recently released study 360 View: Entertainment Services in U.S. Broadband Households, the percentage of U.S. broadband households that use only antennas to receive TV has steadily increased since 2013, and now stands at 15%.
Why? Parks says this increase coincides with a drop in pay-TV subscriptions … and an increase in Internet-only video subscriptions.
“Pay-TV subscriptions have dropped each year since 2014, falling to 81% of U.S. broadband households in the third quarter of 2016,” said Brett Sappington, Parks’ Sr. Director/Research. “Several factors have played a part in this decline, including growth in the OTT video market, increasing costs for pay-TV services, and consumer awareness of available online alternatives.”
Parks Associates data also confirm declining pay-TV satisfaction in each of the last three years: Just one-third of pay-TV subscribers are “very satisfied” with their pay-TV service.
In contrast, Parks Associates’ OTT Video Market Tracker, 63% of U.S. broadband households subscribe to at least one OTT service, and 31% of U.S. broadband households have multiple OTT service subscriptions.
“Pay-TV providers are adapting to address a fundamentally different video services market than existed three years ago,” Sappington said. “Challenges still remain for consumers in aggregating and discovering their favorite content and being able to watch on their preferred screen. Live broadcasts of high-profile events remain a challenge for online delivery, though pay TV and broadcast TV conquered live distribution long ago. These challenges represent areas in which pay-TV providers, or new entrants, can still win consumer attention, viewership, and revenue.”
PAY-TV DOWNGRADES OUTPACE SERVICE ADDITIONS
Among the additional findings in the study, Parks finds that in 2016 twice as many subscribers downgraded (12%) their pay-TV service, while just 6% of respondents upgraded it.
“With the continued decline of traditional pay-TV subscriptions, 2017 will be characterized by the rise of online pay-TV services,” Sappington noted. “While traditional pay TV provides superior viewing quality, OTT video commonly excels in discovery, portability, and personalized user experiences. Consumers care less about the network used to deliver the content than they do about access to the content, ease of use, and convenience.”
