Though pay-TV providers enjoyed their “best quarter in years” during 1Q14, recent research indicates that today’s consumers are no more likely to become cord cutters than they were three years ago.
A study commissioned by TDG found that 14.8 percent of today’s broadband users are either definitely, moderately or somewhat likely to cancel their service within the next six months. That number compares to 13.5 percent in 2011, 15.1 percent in 2012 and 15.3 percent in 2013.
Though providers saw their numbers inflate earlier this year, TDG representatives attribute that increase to seasonal gains, special promotions and other offers. But it’s also because there isn’t yet a comprehensive over-the-top (OTT) provider that serves as a complete substitute for pay-TV services.
Intel sold its OTT offering to Verizon, which is now rumored to have lost interest in launching a service. Google’s OTT offering failed; Sony’s given up, and Apple hasn’t yet made a real move. All that is according to Michael Greeson, president of TDG, who pointed out that DirecTV and DISH have expressed interest in pursuing OTT services of their own.
“Funny that the new boss is looking more like the odd boss as incumbents emerge as major movers in the OTT video space,” Greeson said, commenting on the fact that nontraditional providers have for the most part failed to make a substantial mark on the industry just yet.
Services like Netflix have certainly been successful, but the OTT provider doesn’t represent a true alternative to pay-TV as it lacks programs like news and sports. On the other hand, big players like DISH and DirecTV have large swaths of infrastructure in place, something that might make it easier for them to move forward with OTT programming.
But while newcomers’ OTT efforts have by and large failed to loosen the stranglehold of traditional providers, the pay-TV landscape will change in the future as technology evolves and innovation occurs. With this in mind, consumers can expect more OTT options which will be countered with more robust TV Everywhere offerings from traditional providers.
A decade ago, few could have imagined how Netflix would change our lives, giving us on-demand access to a comprehensive selection of television programming, movies and documentaries. Where will we be 10 years from now?