Report: ‘Skinny Bundles’ Could Eat Into Older Pay TV Market

Majority of older Pay TV consumers say they’re wasting money on unwatched channels
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BOSTON—The creation of the “skinny bundle” by pay TV operators, TV packages composed of selected channels targeted at a specific customer segment, is aimed at getting younger viewers to sign-up for pay TV rather than cut the cord. However, according to a recent survey from Altman Vilandrie & Company, a problem area has arisen – skinny bundles aren’t just appealing to new pay TV customers, but the older, established ones as well.

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The survey reports that two-thirds of older consumers believe they are wasting money on channels they do not watch. And while those in the 18-24 age group are still the most interested party in skinny bundles, the threat of having older customers also switch to them looms.

“The surprising level of dissatisfaction with unwanted channels we found among older subscribers shows the difficult balancing act skinny bundles create for pay TV providers,” said Jonathan Hurd, Altman Vilandrie & Company director. “It is critical for providers to design optimal bundles that maximize adoption of new subscribers while simultaneously limiting appeal to existing customers—no small task, based on simulations we’ve run using the survey findings.”

A contributing factor to the possibility of older customers making a move to skinny bundles is that they do not watch as much online content as the younger generation. Younger viewers frustrated with pay TV are more likely to go with online sources like Hulu or Netflix, but for those aged 55 or older, only about 30 percent watch TV shows or movies online weekly, meaning most could look to address their frustration with pay TV services by downsizing to skinny bundles.

Additional findings from the survey include that 13 percent of online video consumers “borrow” another person’s account for at least one paid online video service. Also, TV Everywhere hasn’t gone anywhere, as only 36 percent of respondents are aware of the service that allows for viewing pay TV content from mobile devices, the same as in 2013.

To see the full findings from Altman Vilandrie & Company’s report, contact Jonathan Hurd at jhurd@altvil.com.