Report: Pricing Less of a Concern in Cord-Cutting Decisions

TEMPE: The new State of Online Video report from Limelight Networks reveals that pricing has become less of a factor for consumers when making the decision to cut the cord, while the availability of their preferred content has become more important.

Seven out of ten consumers subscribe to at least one streaming video service, the survey says. The report indicates that 80 percent of Millennials subscribe to at least one OTT platform, and 39 percent watch at least seven hours of online video per week.

Of all the respondents, 29 percent mentioned price as the main reason for cutting the cord, a figure that is down by more than 8 percent since last May. The ability to directly subscribe to the channels they want online was listed as the primary cord-cutting factor by 20 percent of respondents, a 4-percent increase. Also up is the number of consumers who said they would “never terminate cable or pay television subscription,” rising from 10 percent to 15 percent.

For Millennials, content availability is particularly important. This demo (18- to 35-year-olds) is 7 percent more likely to shift viewing to OTT content and cancel pay-TV subscriptions when they can subscribe to channels directly online.

Video quality is also an increasingly important factor. TV shows and movies are the most watched type of online video, while the popularity of original content/YouTube videos has fallen. “Millennials, in particular, are watching less YouTube in favor of OTT services,” the survey indicates.

Computers and laptops remain the dominant devices for online video. However, among Millennials, the smartphone is the top device. The survey also points to an increasing acceptance of advertising in online video.

“Our research continues to show increasing adoption of OTT content, especially among younger consumers,” said Nigel Burmeister, VP of global marketing at Limelight Networks. “Consumers are demanding access to content when they want it, using the device of their choosing. Traditional providers and delivery models are increasingly at risk of being left behind as consumers become more savvy.”