One in five pay-TV subscribers consider online video as a replacement

A new report from ABI Research finds about $17 billion are at risk for U.S. pay-TV operators as subscribers consider online alternatives.
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Nearly 20 percent of online consumers consider online video as a replacement for pay TV, which amounts to $16.8 billion at risk for traditional subscription-TV providers in the United States, according to a new Technology Barometer study from ABI Research.

According to ABI Research, pay-TV household penetration in the United States will decline about .5 percent each year through 2017, and that this slow migration will continue even with an economic recovery given due to improved online and over-the-top (OTT) video experiences.

To offset this, TV operators should build a business that leverages OTT components, ABI Research advises.

"While many OTT services focus on movies, the goal of lightweight pay-TV packages should be to introduce customers to the brand and tease customers with premium content offerings," says Sam Rosen, ABI Research practice director, TV and video.

The ABI Research Technology Barometer points out that 30 percent of online consumers that subscribe to a pay-TV service and the foundation in place for OTT services don’t yet see the value proposition for online video. This group is ripe for building and positioning services.