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Video’s ‘New World Order’

The pay-TV penetration rate in the U.S. slipped from 73 percent in 2017 to 67 percent in 2018, according to PwC, while the percentage of loyal subscribers in a “committed partnership” with their cable/satellite service rose from 17 percent to 19 percent.

The findings were released in PwC’s A New Video World Order: What Motivates Consumers? report, which surveyed more than 2,000 people between the ages of 18 and 59 in households with an annual income of more than $40,000.

The report indicates that 76 percent of respondents are Netflix users—as compared with the 67 percent subscribing to pay-TV services; last year, Netflix and pay-TV were at the same level at 73 percent. The report also explores shifting demographic trends, with older consumers now cutting the cord more while “younger consumers are showing signs of positive pay-TV relationships.” Of note, the percentage of those 50-plus who have cut the cord rose from 19 percent in 2017 to 28 percent in 2018.

With age being a less relevant predictor for how a consumer will engage with content, PwC identified five broad audience groups based on viewing behavior and interests: indulgists, traditionalists, fanatics, engagers and connoisseurs.

Indulgists are a key revenue driver for pay-TV operators and streamers. About 57 percent subscribe to pay TV. They spend about $70 a month on video content and consume around 17 hours a week. More than one-third of this segment spends more than $100 per month on video entertainment.

Engagers are the “future of immersive entertainment and the leaders in online engagement,” PwC says. About 43 percent subscribe to pay TV, and they are spending about 12 hours a week on content consumption. The average video content spend for engagers is $59 a month. They often share subscriptions with friends and family and engage in social media while watching.

Fanatics will do “anything to have access to an endless selection of content,” but only 32 percent subscribe to pay TV and their average monthly spend is $55. They consume about 16 hours of video a week. They are more likely to be cord-cutters while also subscribing to multiple services at one time.

Connoisseurs are picky about content and savvy about subscriptions, with just 27 percent having a pay-TV service. They spend about 10 hours a week with video, with an average spend of $49 a month.

Traditionalists prefer live TV, with about 45 percent subscribing to pay TV. Spending an average of $63 a month, they are watching about 15 hours a week. “We expect this segment will diminish over time as accessing content online and on apps becomes even more commonplace.”

PwC also found that only 12 percent of consumers say they can find content on streaming platforms easily, with most finding search functions and recommendation algorithms deeply inadequate. “Consumers still prefer reviews and recommendations from real people because AI recommendations are falling short,” PwC says. Also, half of the survey group said they would cancel a subscription “if the service was overwhelming (too much content) or inconvenient (not enough ways to overcome poor discovery).”

PwC highlights how blockchain technology could improve the consumer experience; for example, more than half of those surveyed said they’d like to pay just one fee for all of their platforms every month. “Blockchain technology could fill this key consumer need by simplifying the barriers around intellectual property rights, payments and contractual terms that drive fragmentation today.”

The report also stresses that the “death of TV has been greatly exaggerated,” with live viewing and smart TV usage on the rise.

PwC offers some suggestions on how content owners and platforms can “future-proof” their customer relationships, including viewer-driven storytelling and branded content and offering more TV shows and films from outside of the U.S. “Consumers are more open to foreign-language programming than ever before,” PwC says. “As technology overcomes language barriers with subtitles and dubbing, opportunities for global partnerships abound.”

About Mansha Daswani

Mansha Daswani is the editor and associate publisher of World Screen. She can be reached on


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