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Rising costs are the reason most consumers reduce or drop
their TV subscriptions, so called "cord-shaving" or
"cord-cutting," according to PWC. But for those who scaled back
what they were paying for TV, adding streaming services had the
opposite effect.
The company surveyed 1,200 U.S. consumers as part of its annual
TV and video consumption study, and found that 51 percent of
those who opted to scale back their pay-TV packages ended up
paying more for video content than they did a year ago. Of those
surveyed who have dropped their TV packages entirely, 68 percent
said they were paying less for their video content than they
were a year ago.
“Apparently, trimming the cord did not save them money, likely
because they added costs of streaming services or paid apps.
This indicates they are willing to pay extra for a more
streamlined or focused experience on where they find value,”
said the report.
PWC’s survey found that more pay-TV customers expect to keep
their subscriptions next year: 84 percent said they expect to
have a TV subscription one year from now, compared to 70 percent
who said that a year ago.
While PWC predicts the cord-cutting phenomenon weakening in
2017, the U.S. pay-TV industry is coming off a particularly
brutal year.
Pay-TV services have shed roughly 1.4 million subscribers
through the first three quarters of 2016, according to analysis
by MoffettNathanson. That would make it the largest decline
through three quarters on record.
That is why pay-TV companies including Dish Network and AT&T
Inc's DirecTV are moving toward providing live streams of TV
channels as a way to keep consumers who eschew traditional TV
bundles. Dish Network introduced SlingTV last year and AT&T
launched DirecTV Now two weeks ago.
MoffettNathanson estimates that Dish has added 911,000 SlingTV
subscribers since the first quarter of 2015, when Dish first
included SlingTV in its subscriber count.
But they are not alone in this new burgeoning market: Sony Corp
has its own live streaming TV service called PlayStation Vue and
Hulu is adding a live TV service next year as well.
(Reporting by Tim Baysinger; Editing by David Gregorio)
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