By Jennifer Broussard-Mabee | February 4, 2014
Jennifer Broussard-Mabee is the Senior Product Manager at Centris, a cutting-edge marketing science firm that provides predictive analysis and custom data to the nation’s leading communication and entertainment companies. You can follow her on Linkedin and read more of her blogs here.
The total number of US households subscribing to premium channels has dropped since this time last year. This trend begs the question: is greater consumer awareness and use of over-the-top (OTT) video a threat to HBO, Showtime and Starz? Centris’ Evolution of Video Q4 2013 data provides insight about these trends and reveals that when consumers shave off their premium channel subscriptions, the decision is primarily economic, with OTT subscribing an important factor for only a very small segment. These findings strongly suggest that growth in OTT subscribing has not occurred at the expense of premium channels.
Since Q4 2012, premium channel subscribing among US households to dropped 7 points to 33%. During that same time, pay-TV subscribing trended down slightly from 85% to 83%. This means a very small portion of the drop in premium subscribing may be attributed to the overall decrease in pay-TV subscribers from Q4 2012 to Q4 2013.
Even factoring in decreased pay-TV subscribing, eroding premium penetration raises questions about the role of OTT in household decisions to shave premium channels from their pay-TV service. Considering subscription video streaming services such as Netflix, Amazon Prime and Hulu Plus, 37% of Cord Shavers and 36% of premium channel customers subscribe to at least one OTT service. Of households subscribing to an OTT service 84% have used that service in the past month, this figure is consistent across Cord Shavers and premium channel customers. Taken together these findings indicate a similar level of OTT use among premium channel customers and Cord Shavers and casts doubt upon OTT as a major factor in Cord Shaving.
In fact, when Cord Shavers were asked why they eliminated their premium subscription, the top reasons cited were too expensive (37%) and a special deal ended (33%) and these findings are consistent among Cord Shavers with and without OTT subscriptions. Digging deeper, when Cord Shavers with OTT subscriptions were asked if that subscription factored into their decision to drop premium channels, only 33% acknowledged that having an OTT subscription was strongly or somewhat influential. Bearing in mind that 37% of Cord Shavers have an OTT subscription, this means OTT was an important consideration for only 12% of all Cord Shavers.
These findings are based on Centris Q4 2013 Evolution of Video (EoV). EoV is an ongoing, syndicated research program surveying 30,000 US households per quarter to monitor consumer use of voice, video and data products with a sharp focus on shifting patterns of video content consumption.
Centris Marketing Science, headquartered in suburban Philadelphia, is a specialized marketing analytics firm that provides ongoing survey programs and econometric modeling services to the communications and entertainment industries. Owned by AUS Inc., one of the nation’s top market research companies, Centris’ team of renowned economists has a unique approach to data integration, used to focus on consumer behavior in the voice, video and data markets on both a national and local level. Centris serves the cable, broadcast telecomm, satellite, entertainment, OEM, marketing and wireless industries with a sharp focus on helping clients understand their market share, consumer shifts and economic impacts.