US-based TDG Research has found that adult broadband users are now less likely to cancel their pay-TV service. Research conducted in the first half of 2015 found that the percentage of these users ‘moderately to highly likely’ to cancel their subscription fell 20% YoY.
Those willing to ‘cord-cut’ has remained steady for several years, at around 7% of ABU pay-TV subscribers. However, it fell in early 2015 to 5.7% – the first significant change in five years. Those saying that they will definitely cancel their service was also cut in half, from 2.9% to 1.4%.
Because the data was collected in the first half of 2015, it was indicative of cancellation proclivity in the second half of 2015. TDG’s predictions were recently upheld by lower reported losses in Q3.
Separately, Boon Dog Professional Services, a consultancy, said that, in Canada, 153,000 subscribers were lost by service providers, seven times the level of 2014, although still just 1% of the total subscription base of 11.5 million households. In addition, Boon Dog estimates that the number of IPTV subscribers will surpass DTH satellite TV subscribers in the fourth quarter of 2015.
Analyst Comment
This looks like a significant change in reported opinions. Of course, what people say they will do is often different from what they actually do – ask any election pollster – but if the reports from service providers also continue to reinforce this survey then it may be reasonable to assume it is accurate. What does it mean? It probably means that the historic “rump” of those that had been irritated for years are effectively out of the old subscription system and that future churn and cable-cutting will depend on current actions by operators, rather than their history. While traditional service providers can hang on to control of live events, especially sports, they may be able to maintain their businesses, although increasingly viewers are likely to supplement their subscriptions with OTT subscriptions from Netflix and Amazon. They will continue to have to work on providing the packages that will fit into the budgets and desires of their viewers. (BR)
