U.S. Cord-Cutters Spend $85 on OTT Services


The average cord-cutter is spending $85 a month on online pay-TV or standalone subscription-based services, according to new research from Parks Associates.

That amount is about $30 less than what those customers would be spending on a traditional pay-TV service, according to Quantified Consumer: Cutters, Nevers, and the Rebundling of Video.

“Cost concerns drove many consumers away from traditional pay TV, and OTT services are delivering on the promise that they can offer desired video content at a considerably lower price point,” said Elizabeth Parks, president of Parks Associates. “But we find 47 percent of cord-cutters subscribe to four or more OTT services, so in order to have an optimal video portfolio, they are creating their own video bundles by stacking OTT services.”

The Parks report also reveals that cord-cutters spend nearly twice on OTT services as cord-nevers every month. Parks estimates that there are more than 6 million cord-nevers in the U.S.—broadband homes that have never had a traditional TV service. Cord-nevers are also less likely to own smart TVs and streaming media players. Almost 60 percent of cord-cutters own a smart TV.

“As they migrate away from traditional pay TV, cord-cutters seek service offerings that more closely meet their video content needs with the added value of flexibility at a lower cost,” Parks said. “OTT services have to continually deliver flexibility and customization at a reasonable cost to keep these subscribers engaged and retain them on an ongoing basis.”