More than half (54 percent) of all consumers have already tried alternatives to pay TV, including services like Netflix (Nasdaq: NFLX), Apple TV or a network's website, a new study says, and those numbers will increase as providers develop a simple, reliable and cost effective solution.
The study, from Boston-based Chadwick Martin Bailey, includes interviews from 1,493 consumers, about 16 percent of whom say they're likely to cut the cord to their pay-TV providers, or reduce service levels in the next year. CMB said cost concerns were a major issue for consumers, and were cited as the main reason for dropping pay TV, for cutting back on pay TV, and for never signing up for pay TV in the first place. Some 20 percent of pay TV's most valuable subscribers (highest ARPU) say they are likely to cut back in the year ahead.
CMB said the survey showed that an online solution that gives consumers cost savings, ease of use and reliability will significantly disrupt the pay TV status quo.
"The main question is not whether someone will offer this, but when," the report finds.
This research, like that released today by online video platform Ooyala (see related story), suggests tablets are playing a major role in the change in viewing habits. CMB found 63 percent of people who recently watched TV on a tablet say they used a tablet even though they had access to a television with the very same content available.
And, in a nod toward increasingly popular digital video, respondents found streaming video twice as appealing as downloading and storing content on their own devices.
"These findings show every part of the consumer TV and movie watching experience is up for grabs," said Jon Giegengack, director at Chadwick Martin Bailey. "In the digital music revolution, the primary shift was in how music was bought and stored. When it comes to TV and movies, everything has the potential to change: whom consumers buy from; how much they pay (if they pay at all); and the range of times and places offering viewing opportunities."
This study was done as part of Chadwick Martin Bailey's self-funded CMB Consumer Pulse program. Data was collected from U.S. residents (aged 16-75 who have high speed internet access at home and watch at least two hours of television programming per week), via a nationally representative online survey questionnaire within the United States in 2011.
"Consumers are ready to embrace a new method of accessing TV content," said Peter Fondulas, CMB's co-author on the project. "They've got motive, they've got interest, and a majority have already begun kicking the tires. What's missing now is the right platform and offer--something easy to use, understandable, reliable and affordable. Various players are working hard to come up with that solution; as we learned from the music industry, the first one to offer it effectively will be in an extremely strong position."
- see this release
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