Survey suggests MVPDs were right: Consumers are ready to pay to play
For the past several years--and maybe longer, who knows in this economy--MVPDs, particularly cable operators but more recently even telcos and satellite service providers, have pooh-poohed what seemed like an unending exodus of paying subscribers.
Doomsayers and those who just generally dislike the idea of paying for television jumped on these subscriber losses as evidence that the MVPD business was slow business and the end was near. OTT, they cried in unison, is winning the day, giving consumers the tools they need to cut the cords that bind them to their pay TV services.
A new generation of service providers led by Netflix, but quickly followed by Hulu and Amazon with Apple and Google always lurking in the shadows, was poised to change the business of watching video. Pay TV was so 20th Century when you could watch free TV on an iPad or Android smartphone or PC or even via your Xbox, conventional wisdom went.
And the MVPD community--admittedly, a group that has lacked some credibility in the past and a group that tends to see customers as dollar signs, not people--kept saying that the sky was not falling, that OTT was just a spark that would be squashed by TV Everywhere and multiscreen access to the programming consumers already get from their service providers. To back this up, many offered up numbers that still looked good on the bottom line driven by increases in non-basic subscriber numbers.
It was, however, just too attractive to believe that pay TV operators, those greedy, soulless voices on the other end of customer complaints hotlines, were doomed.
Turns out, at least according to the latest J.D. Power and Associate numbers, that the pay TV providers were right all along and that subscribers--at least those who spend the big bucks--weren't running off to the latest Web site for free content but were standing by their MVPDs.
"Premium television package subscribers are more loyal and more likely to purchase additional products from their television provider than are subscribers with basic and expanded basic programming packages," read the lead sentence in a news release J.D. Power and Associates let loose to promote its 2012 U.S. Residential Television Service Provider Satisfaction Study.
The news release also quoted Frank Perazzini, director of telecommunications at J.D. Power and Associates, as apparently corroborating what MVPDs have been saying for years: "Premium package subscribers have proven to be better brand advocates. Television providers catering to these high-value subscribers with video-on-demand and mobile applications will be well positioned to keep these customers and grow their relationship, moving forward."
There are multiple caveats here, not the least of which is the ability of MVPDs to keep their subscribers happy, but the implication is clear: The pay TV business has weathered the OTT storm and is sailing along pretty smoothly. Those who thought it wouldn't succeed truly underestimated two things: the ability of MVPDs to destroy anything in their paths, sometimes at glacial speeds but with irrevocable force, and the unwillingness of time-constrained consumers to go off looking for something else if what is already available is adequate. -Jim