Pay TV operators now have another growing threat to worry about in addition to cord cutting: Piracy.
According to a recent study, about 6.5 percent of households in North America use illegal television streaming services each month. In fact, illegal streaming services now generate at least $840million in fees from consumers that pay for their services. The average is about $10 per month.
This, however, translates to about $4.2 billion in lost revenue for satellite, telco and traditional cable providers.
Interestingly, piracy is hurting the streaming industry, too. In fact, streaming providers will lose at least $50 billion between 2016 and 2022.
The bad news is that piracy is not going anywhere any time soon. Fortunately though, industry experts do see piracy declining in the coming years.
“Piracy will never be eradicated,” stated Simon Murray, principal analyst at Digital TV Research. “However, it is not all bad news. Piracy growth rates will decelerate as more effective government action is taken and as the benefits of legal choices become more apparent.”
The only logical way for pay TV providers to reduce cord cutting is to offer services that are more flexible, affordable and customizable. Providers need to incentivize their media offerings, by making them more appealing and customer-friendly than the services they access illegally.
Until this happens, piracy will continue to plague the industry. There is no other way around it.
So as you head into 2018, now is the time to ask whether your services are in line with consumer expectations. What can you do to make consumers reach for your services instead of illegal ones?