Number of Pay-TV Customers Subscribing to OTT Jumped nearly 50% in 2020

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DALLAS—Pay-TV subscribers want access to online and OTT services, however, other advanced features could help keep pay-TV subscribers from cancelling their subscriptions as well, according to a new study from Parks Associates.

Parks Associates’ “Pay-TV: Perception, Adoption and Retention” report found a nearly 50% year-over-year increase in the number of pay-TV consumers who receive online video services. More than half (60%) want the TV shows and movies available through OTT platforms available through their pay-TV subscription.

"If there was ever a time when entertainment service providers believed that OTT was a phase, they are now convinced of its permanence," said Kristen Hanich, senior analyst, Parks Associates. "In late 2019, the market reached the crossover point where the same percentage of U.S. broadband households subscribed to an OTT service as subscribed to a pay-TV service, and now OTT adoption outpaces pay-TV by double digits. The good news for providers is consumers often have both pay-TV and OTT—79% of pay-TV households have both pay-TV and OTT subscriptions. Providers are in a spot where they must redouble their efforts to engage these subscribers by executing new innovations and business models, or risk accelerating customer losses."

The average number of OTT services among households that have any OTT service is 3.8. That number is actually higher among pay-TV services that have OTT, as they subscribe to 4.2 OTT services on average.

In addition to streaming, other advanced features could help keep pay-TV subscribers from cancelling their subscriptions. Per Parks’ report, 43% of pay-TV households are interested in having video calls on their TVs; 40% want to control smart devices and security systems from the TV; and 34% are interested in playing video games on the TV through a cloud gaming service.

"Pay-TV providers must keep offering their most valuable content, which includes live sporting and cultural events," Hanich said. "Additionally, they must offer access to streaming, target new service to their interested customers and perhaps be willing to take a hit on pricing until this chaotic market stabilizes."

The full Parks Associates report is available online