Popularity of OTT Pay-TV Service Grows Among Broadband Households

DENVER—The momentum continues for online pay-TV services as 6 percent of U.S. broadband households report they are highly likely to subscribe within the next 12 months, a move that would more than double the number of broadband households , new research for Parks Associates reveals.

"In 2017, 14 percent of non-pay-TV households were planning to subscribe to a service in the next 12 months, a notable increase from 2015 and 2016," said Parks Associates Senior Director of Research Brett Sappington, who is presenting the findings today (May 14) in Denver during the "Survivor’s Guide to the New Video World" workshop at The Pay TV Show.

More than 60 percent of such households are planning to subscribe to a standalone pay-TV service or one that’s bundled with a traditional service, which indicates a willingness by consumers “to test alternate pay-TV offerings,” he said. The research found that a third of cord cutters surveyed said they would have continued subscribing to traditional services if they were offered a Netflix-like service bundled with broadcast TV channels.

Currently 78 percent of broadband households subscribe to a pay-TV service, while only 5 percent of pay-TV households subscribe to an online pay-TV service, the research found. Further, 8 percent of U.S. broadband households have downgraded their pay-TV service recently and supplement viewing with video on an internet-connected device.

Parks Associates also asked consumers about which channels they would be least likely to give up as they change how they access content. More than half said they would be least likely to give up their local channels, said Sappington. “I can easily see how a company offering local channels and OTT could be successful,” he said.

“What we have seen consistently, is consumers –even young viewers—saying they still think live content, such as sports, as well as a major event like the season opener or finale of a show, is relevant,” he said.

More information is available on the Parks Associates website

Phil Kurz

Phil Kurz is a contributing editor to TV Tech. He has written about TV and video technology for more than 30 years and served as editor of three leading industry magazines. He earned a Bachelor of Journalism and a Master’s Degree in Journalism from the University of Missouri-Columbia School of Journalism.