Pay TV vs. OTT no longer 'either/or'

According to Parks Associates, relationships among traditional pay TV and over-the-top (OTT) video providers are shifting from a competitive ...

Streaming media players near 40% penetration
Streaming media players near 40% penetration

According to Parks Associates, relationships among traditional pay TV and over-the-top (OTT) video providers are shifting from a competitive stance to one of partnerships and complementary offerings. The research house says 52% of U.S. broadband households subscribe to both pay TV and one or more OTT services.

"The nature of competition in video services has changed. Today, it is less about replacing competitors and more about how you complement others in the market," said Brett Sappington, Parks' senior director of research. "Over one-half of U.S. broadband households have a combination of pay TV and at least one OTT service. Consumers are willing to carry multiple video accounts to get the content they want. Often they will select a preferred service with the content that they can't do without and then select other video services that complement the high priority option."

The research house says 11% of U.S. broadband households watch over-the-air (OTA) broadcast TV channels via an antenna, and pay TV service subscriptions fell from 87% to 77% between 2012 and 2017. The rise of OTT correlates to a decline in viewership for live, linear TV channels. In particular, the audience for OTA broadcasters has diminished over time, especially among younger heads of household.

Additional research indicates:

  • Approximately 33% of cord cutters would have stayed with their service provider if offered a Netflix-style service bundled with broadcast TV channels.
  • 5% of U.S. broadband households have never subscribed to a pay TV service.
  • 8% of U.S. broadband households have recently downgraded their pay TV service and supplement viewing with video on an Internet-connected device.
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