DALLAS—Consumers are more likely to recommend online pay-TV to their friends than traditional pay-TV services, such as cable television, a new study from Parks Associates reveals.
The net promoter score (NPS), a measure of the willingness of a consumer to recommend a service, for traditional pay-TV worsened in Q3 2018, registering –19 as compared to a score of –15 in the first quarter of the year, according to Parks Associates’ “360 Deep Dive: Churn and Retention in Pay TV” report.
The decline in willingness to recommend traditional pay TV stands contrast to the positive NPS recorded for major online pay-TV and OTT video services. However, Parks Associates noted some exceptions. For instance, traditional pay-TV providers, such as DISH and Optimum, bucked the downward slide of their category by improving their NPS scores. Additionally, the overall NPS of online pay-TV and OTT service providers while positive, declined from 2017 to 2018.
Brett Sappington, senior director of research at Parks Associates, pointed to a clear split between older and younger households when it comes to their loyalty to pay TV — with younger households being more loyal to OTT service and older households standing firm with traditional providers. “A key challenge for pay-TV providers is to design and launch services that will inspire loyalty among younger households,” he said.
Pay TV providers are scrambling to address this loyalty disparity by taking steps such as offering their own OTT brands and other services, said Sappington. A simple comparison underscores the urgency for pay-TV providers. “The percentage of U.S. broadband households that do not subscribe to traditional pay TV increased from 16% in 2011 to 22% in 2017,” said Sappington.
The report also finds that 79% of U.S. broadband households reported having pay-TV subscriptions in early 2018 and that about one-third of pay-TV subscribers changed their service between the Q1 2017 and Q1 2018.
Parks Associates will present consumer research on the video industry Dec. 10–12 during the Future of Video: OTT, Pay TV, and Digital Media conference in Marina del Rey, Calif.
More information about the report is available on the Parks Associates website.