Report Seems to Confirm OTT Is Still Eroding Pay-TV Services

A new study from the Diffusion Group seems to confirm what most pay-TV operators are well aware of at this point—subscribers who are downgrading pay-TV services are proving to be more dependent on streaming over-the-top (OTT) video.

As the report shows, respondents who indicated they will definitely downgrade their pay TV service in the next six months spend 36.7 percent of their TV time watching OTT content from providers such as Hulu and Netflix.

Conversely, those who are moderately likely to downgrade during the next six months spend 26.4 percent of their time watching OTT content. The percentage of TV time that subscribers spend on OTT plummets even further for those who are slightly likely to downgrade (21.4 percent) and for those who are neutral or unlikely to downgrade (21.9 percent).

Case in point: OTT continues to be a big headache for pay-TV operators. In fact, it’s safe to say that this will be the defining challenge of this era for the pay-TV industry as a whole. Operators will therefore continue to search for creative ways of reducing the impact of cord cutting, like offering skinny bundle packages with fewer channels and experimenting with broadband data caps to deter large amounts of streaming OTT media to enter the home.

One positive takeaway for the pay-TV industry is that many consumers are finding OTT content to be more expensive than basic cable, as each standalone service can add up to a hefty monthly bill. Netflix alone, for instance, now costs $9.99 per month.

We want to know: How are you dealing with cord-cutting in your company?