Impact of Streaming Video Services on Pay TV

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ENGLEWOOD: According to a new survey, 20 percent of streamers in the U.S. plan to switch, downgrade or disconnect their pay-TV services in the next six months.

The Going with the Flow: How to Captivate Video Streamers report from The Diffusion Group (TDG), on behalf of CSG, finds that streamers report watching more than 26 hours of television each week, with half of this time spent viewing subscription streaming services such as Netflix, Hulu and Amazon Prime. Streaming services with the highest subscription rates offer original content and sports content.

To align with these trends, the ability to offer new skinny bundles and innovative OTT-like services will become increasingly important for pay-TV providers. Survey respondents had a significant interest in a new type of feature bundle, consistent with the recent market trend of incumbent pay-TV providers working to integrate multiple streaming services into their service offering. Consumers expressed interest in a bundle that offers the ability to search for content across multiple services, use a single recommendation engine, receive multi-service discounts and have unified billing.

Other findings from the survey include that 80 percent of streamers subscribe to at least one streaming video service in addition to, or instead of, pay-TV service from a cable, satellite or IPTV provider. Around 79 percent primarily stream video on their TV sets. Seventy-two percent of sports streamers cite sports as their most important streaming service.

“Two-thirds of U.S. broadband households use a subscription video service like Netflix,” said Michael Greeson, TDG’s co-founder and director of research. “Forty percent of this segment subscribe to multiple streaming services, making them prime prospects for value-added services that deliver a new level of user engagement and blend multiple services into a single experience.”

“Consumers are building and bundling their video experience with multiple providers, opening an opportunity for incumbent pay-TV providers to leverage their growing partner ecosystem to package both traditional and streamed services together to attract the multi-service streamers,” said Brian Shepherd, president of broadband, cable and satellite business at CSG International. “CSG believes that pay-TV providers are uniquely positioned to deliver the video bundle of the future, as they already have the network infrastructure, customer preference history, analytic insights and billing relationship to tie everything together in a way that delivers innovative new value to the market.”