About 20 percent of consumers could ditch their cable TV subscriptions in 2016, according to a survey by accounting firm PwC, as competition between pay TV and over-the-top services such as Netflix heats up.
Over-the-top (OTT) refers to third-party video providers whose content can be delivered over the Internet to homes without a direct subscription to cable TV or satellite. PwC talked to 1,200 U.S. consumers for its report, titled "Videoquake 3.0: The Evolution of TV's Revolution." The results are very similar to another survey released by Tivo last week.
OTT services can offer channel customization and high-quality programming via online streaming services. As a result, more TV viewers are downsizing their monthly bills by opting out of pay-TV services.
PwC found that 79 percent of U.S. consumers subscribe to some form of traditional pay TV. Of those who subscribe, 23 percent said they engaged in cord-trimming in the past year. Sixteen percent of respondents said they had unsubscribed from pay-TV services in the past year, and 5 percent said they have never subscribed to pay-TV services.
The average subscriber receives 194 channels, but regularly watches only 17. In response, pay TV providers are investing in the consumer experience and offering "TV Everywhere" for use across platforms. They are also offering more on-demand streaming options and custom channel packages.
Of those who would consider going back to pay TV, 56 percent said "being able to customize my package to exactly the channels that I want" as their number one motivator. Similarly, 45 percent of current pay-TV subscribers said they most preferred an a la carte package of channels that they could customize themselves.
While consumers feel overwhelmed by choices, they are not dissatisfied with their options. They still greet new programming with excitement.
The survey said 77 percent of 18-to-24 year olds are accessing TV via the Internet. Increasingly, they access via mobile devices.
In 2014, 91 percent of consumers said they could see themselves subscribing to cable in the following year. In 2015, that figure dropped to 79 percent, implying more than one-fifth of consumers could drop their cable subscriptions in the next year. PwC said it is time for content providers and distributors to rethink their business models to remain viable. That means offering a la carte services.