Discounts, promotions luring pay TV subscribers back into fold

Parks Associates research sees online streaming services losing the pricing war
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Pay TV providers are using tried-and-true tactics like discounted premium channels to bring wandering subscribers back into their fold, according to research released by Parks Associates.

Most subscribers leave pay TV services for economic reasons, in many cases lured by lower prices offered by online streaming services. Cable providers, in particular, have suffered a steady stream of subscriber losses for the last half decade, as online competitors like Netflix (Nasdaq: NFLX) cut into their subscriber numbers.

Now, even though these defectors are not unhappy with their online experiences, they are willing to come back to their original providers for the right price, said John Barrett, director of research for Parks Associates, who is presenting his findings today in a firm-sponsored webcast.

"Most people leave pay-TV services due to economic factors, and these are the main influencers bringing them back," Barrett said. "They are not dissatisfied with Internet video. In fact, many cited Netflix Watch Instantly as a very satisfying experience. These re-subscribers were simply ready to take advantage of a promotion as their own financial situation improved."

Probably not surprisingly, traditional pay TV providers like Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), DirecTV (Nasdaq: DTV) and Dish Network (Nasdaq: DISH) were gaining the most from promotions and discounts, while Verizon (NYSE: VZ) FiOS and AT&T (NYSE: T) U-verse re-subscribers "cited content-related reasons at a higher rate, slightly ahead of promotions," the press release said.

"Content availability is an important consideration for TV viewers, and these promotions seem to be the final push many consumers need to jump back into the pay-TV fold," Barrett said. "At the same time, economic factors work against Internet video services. Consumers who canceled their Netflix account cited a need to save money or were responding to the company's price increases."

For more:
- Parks Associates issued this press release

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