Quarter of US pay TV subscribers changed their service in past year

Brett Sappington

Roughly 25% of pay TV subscribers in US broadband households made changes to their pay TV service over the past year, according to Parks Associates.

The research firm’s Entertainment Services in US Broadband Households report claims that 11% of pay TV subscribers downgraded services and 9% upgraded services over the past 12 months, with pay TV penetration eroding slightly in the past few years.

Among households with broadband, pay TV penetration dropped from 87% in Q3 2011 to 85% in Q2 2015, while the percentage of consumers who have never subscribed to a pay TV service has held steady since 2012, according to Parks.

It added that Q2 2015, some 4% of pay TV users subscribed for the first time and 8% switched to a new TV service provider.

“Pay TV adoption rates posted a small decline over the past four years. The recent heightened anxiety about cord cutting and cord shaving centres upon worries that this shift is impacting overall pay TV revenues,” said Brett Sappington, director of research, Parks Associates.

“The overall volume of video consumed across platforms is as high today as it has ever been. As that consumption shifts to new devices and new content sources, revenues will inevitably shift as well.

“Some consumers are definitely looking for ways to cut costs. With the hype around new OTT video services, people are considering their options in video services. At the same time, a notable portion of consumers are upgrading their pay TV services to higher tiers or premium features.”

In contrast with pay TV, Parks said that broadband services are seeing “a greater interest in consumer upgrades than in downgrades”, with some 10% of broadband households intending to upgrade to a faster broadband speed and only 4% planning to downgrade in order to save money.