Over 15% of pay-television subscribers in North America say they are planning to switch, change, or cut their service, while a further third may need to be encouraged to stay with their provider. Nearly a quarter of customers say they are unsatisfied with their service. Yet subscriber numbers remain remarkably resilient.
The Digitalsmiths quarterly video trends survey of over 3,000 consumers in the United States and Canada found that 3.1% of respondents planned to switch their television service in the next six months, while 7.5% said they would change their service and 4.8% said that they would cut their television service altogether.
While over three quarters of respondents said they were satisfied or very satisfied with their television service, 24.2% said they were ‘unsatisfied’.
That suggests millions of households in North America are not happy with their television service provider. Yet a stated intention to stop subscribing may not translate into action.
Interestingly, for the a similar survey a year ago, Digitalsmiths reported that 2.3% of respondents were planning to switch to an online service while 3.8% were planning to cut their pay-television subscription.
Although these figures may be alarming, so far we have seen limited evidence of so-called ‘cord-cutting’.
In the first quarter of 2015, the informitv Multiscreen Index shows that the 10 leading pay-television services in the United States that report figures actually gained 54,800 subscribers.
Over twelve months they lost 177,300 video customers, led by losses from Time Warner Cable, DISH Network and Comcast.
However, with 87.72 million digital television customers between them, such a loss only represents only 0.2% of their subscriber base.
In fact, these ten services had 1.32 million more subscribers than they did three years previously.
So if anything like the number the survey suggests are cutting their television subscription, around the same number are signing up to these services.
Customer churn is a natural feature of the pay-television business and typically runs at rates above 10% a year.
So the top ten television service providers in the have to sign up around 9 million subscribers a year between them just to maintain their numbers.
Subscribers may come and go for many reasons. They may move home, be attracted by competitive deals, seek an alternative service, or simply leave the pay-television world.
Around the same number of respondents added or increased their pay-television services as reduced or removed them. Of the 18% that added services, 36% premium channels, such as HBO. Of the 18% that reduced services, 44% cut premium channels.
Over 80% of respondents claimed to watch only up to ten channels from their pay-television package. Of them, nearly 40% said they watch five channels or fewer.
Asked which of 75 generally available channels they would prefer to pay for on an à la carte basis, on average respondents selected 17 channels to make their ideal line-up.
There was high demand for the Discovery Channel, ranked second after ABC, but ahead of CBS, NBC, History Channel, National Geographic Channel, Fox, PBS, HBO and Comedy Central.
ESPN ranked twentieth. That may explain why ABC Disney is so keen to bundle ESPN with other channels, whether subscribers want it or not.
Only four out of ten respondents were aware that their service provider offered television programming for viewing on a tablet or smartphone. Despite a 5% year on year increase in awareness it suggests that service providers are still failing to market their television everywhere services effectively.
Less than a quarter of those surveyed had downloaded a television app from their service provider and less than half of them used it at least once a week. Only 30% had downloaded a television network app. The most popular was from ABC at 6.5%, ahead of CBS and WatchESPN. However, three quarters of respondents reported rarely using such apps.
This presents an interesting puzzle. Many customers are apparently dissatisfied with their pay-television service. People supposedly want to watch whatever they want, wherever, whenever and on whatever device. So why is there so little apparent engagement with the somewhat limited television everywhere offerings of their service providers or the apps of television networks?
Over half of respondents also subscribed to an online video service such as Netflix. The top reasons given were convenience, cheapness and being able to watch certain TV shows and whole seasons. Other reasons were that they offered a better selection of programmes and that it is easier to find what you are looking for. These ranked above being able to watch on a tablet or smartphone, although the ability to view across a range of supporting devices may be a factor in the growth of such services.
Digitalsmiths, a TiVo company, uses the quarterly report to promote its personalized search and recommendations platform. Only one in five of those surveyed said their service provider makes recommendations based on their interests. Of the rest, nearly 40% said they would like to receive such recommendations.
With ever more competition in the pay-television market, from rivals and online services, the user experience appears increasingly important to customer loyalty. Yet many homes are still stuck with interfaces from a previous era, while they supplement their service with online offerings that work seamlessly across multiple screens.