PwC: Cord Cutting is Slowing, Content Fatigue Rising

NEW YORK: PwC US’s latest TV and video consumption survey reports that cord cutting is happening at a slower rate than predicted, with some cord trimmers finding that they’re actually paying more for video content after slimming their TV bundles.

Videoquake 4.0: Binge, Stream, Repeat—How Video is Changing Forever features insights from more than 1,200 U.S. consumers, focus groups and social media listening. One headline finding is that 84 percent of pay-TV subs expect to subscribe to cable one year from now, versus 70 percent last year, reflecting a slowing down of the cord-cutting trend. The percentage of total pay-TV subs held fairly steady this year at 76 percent, as compared with 79 percent last year. The report found that 51 percent of those who reduced their TV bundles are paying more for video content than a year ago, prior to their cord trimming. The survey also found that 42 percent of all U.S. consumers are paying more for video content now than in 2015.

PwC indicates that streaming services will continue to serve as additions, rather than replacements, to pay TV. “The availability of more great content in more formats may not be the death of traditional pay TV, but rather the beginning of a world in which pay TV is merely one among many video services consumers use,” PwC says.

However, more than two-thirds of respondents reported feeling “content fatigue” given the number of shows available for viewing today. Against this backdrop, PwC explored how viewers are choosing what to watch: “Recommendations from friends and family, especially on social media, heavily influence video selection. Our data shows that cord trimmers, cutters and nevers were more influenced by personal recommendations than traditional pay-TV subscribers when it came to original programming.”

Nearly half of traditional pay-TV viewers, who paid the most for their video content, are spending more than 15 hours per week consuming video content. Cord cutters are the heaviest streamers, with almost half spending more than eight hours a week streaming.

Mobile viewing is on the rise, with 76 percent of consumers watching more on mobile than they did in 2015. Almost 60 percent report that their smartphone was the primary place they view video content, including short-form video, TV shows and, in some cases, full-length films. This rises to 70 percent of the 18 to 24 set. And 80 percent of respondents said they watch videos on mobile devices at home as compared with only 52 percent “on the go.”

The survey also looks at viewing trends of “super streamers”—those streaming video for at least 12 hours a week. They represent 10 percent of all viewers. Of them, 59 percent are keeping up with more shows than they were a year ago; 54 percent are binge-viewing their favorite shows, as compared with just 24 percent of all consumers; and 61 percent are cord cutters, cord nevers and cord trimmers (39 percent also subscribe to traditional pay TV). “Content creators and distributors will want to watch this group closely, if for no reason other than the huge volume of video content they consume as they will likely influence the success of major video content. Their adoption of a new series, for instance, could have a positive effect on the show’s run.”

In terms of pay-TV packages, consumers overwhelmingly want the option to customize which channels they receive. “If selecting an a la carte/custom package, most would opt for basic cable channels and premium channels vs. news channels or premium sports ones.”

However, sports, and having a variety of content options, are why consumers opt to keep the cord, PwC says. “Additionally, the majority of cord cutters and nevers indicate they would subscribe or re-subscribe to pay-TV services if they could get customized bundles, which should be cause for optimism among cable and satellite and telco companies, although there are some business challenges to consider. There’s an opportunity to design tailored bundles at attractive price points for consumers of all incomes.”

The report continues, “For cable, satellite and any enterprise creating video content, success isn’t about price; it’s about access to great content—at an acceptable price, and sometimes even at a premium price. It appears cord cutters are leaving pay TV more because of value for money than anything else. Streaming services are delivering this value through personalized, high-quality content. That said, with the right balance of content/choice selection and pricing, there appears to be no reason consumers would not return to cable or satellite, especially for news and live sports content.”