According to Parks Associates, 20% of U.S. pay TV subscribers surveyed say they are dissatisfied with their pay TV service, representing a 100% increase since early 2013. The research house says only one-third of pay TV subscribers are very satisfied with their pay TV service, a drop from 57% who indicated very high satisfaction levels in 2013.
"High satisfaction with pay TV has dropped across all providers," said Brett Sappington, Parks' senior director of research. "Telco services have seen the highest drop in highly satisfied customers compared to cable and satellite providers. The plummeting satisfaction levels ultimately affect service/channel package upgrades, cord cutting, engagement, and perception of operator-driven service changes (e.g., dropped or added channels)."
About 5% of U.S. broadband households have never subscribed to a pay TV service, Parks says. Adoption declines are most notable among younger heads of household; the average age of pay TV subscribers is older now than in 2014.
"The pay TV industry continues to experience worldwide growth, but the North American market is experiencing a decline in penetration," Sappington said. "A combination of factors, including high monthly fees and a wide selection of OTT services, are pushing consumers away from traditional pay TV. Operators are now adjusting their strategies to address this new environment, including partnering with OTT video services or launching their own independent OTT services. Our research also shows that promotional options, including free or subsidized CPE, could entice potential cord cutters or cord shavers to keep their services."
More than 63 million U.S. broadband households subscribe to an OTT video service, and 36% of U.S. broadband households have at least one streaming media player. The research firm says the top 10 subscription OTT video services in the U.S. market at the end of 2016 included Netflix, Amazon Video (Amazon Prime), Hulu, MLB.TV, WWE Network, Sling TV, HBO Now, Crunchyroll, Showtime, and CBS All Access. Parks forecasts that online/OTT pay TV services (such as Sky Now TV, Sling TV, and DirecTV Now) will flourish across global markets.