Heavy Reading Survey: Pay TV subscribers not swayed by online content

Kishore: Market has 'huge price sensitivity'
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Despite the growing wealth of free and inexpensive online content, pay TV subscribers seem pretty content with their current service providers and might even be willing to pay a bit more for some more premium features, Heavy Reading's "State of the Video Consumer" survey suggests.

Only 7.3 percent of the 528 respondents to the survey indicated they were unhappy with their service providers and wanted to switch, said Heavy Reading senior analyst Aditya Kishore during a keynote address to TelcoTV 2012 participants on Wednesday.

The main reason subscribers gave for being discontented with their pay TV providers was "the cost of service," with 17.5 percent describing the service provider's price as "poor," Kishore said, noting that "there is huge price sensitivity in the market."

Even though 70 percent of consumers said they were interested in Internet video on TV, they were not necessarily opening their arms to over-the-top online video purveyors, Kishore said.

The survey showed, he said, that "smart TVs [which might circumvent pay TV services] and connected devices are not having a huge impact" and are not seen as a "huge, huge threat."

There was, Kishore indicated, "a lot of interest in connected services" and "definitely interest in Internet video." That, though, ended up being "a lot of interest in free content."

When it came time to pay for content, he said, the respondents indicated that "integrating Internet TV service into pay TV is attractive," since 12 percent of consumers said they would pay up to $10 a month for a premium video tier with Internet content and 26 percent indicated a willingness to pay $5 a month.

While the respondents did in some ways threaten ISPs if their online video experience is sub-par--"something to be concerned about if you're a broadband service provider," Kishore said--for the most part the survey revealed "no major changes or shifts in the pay TV landscape."

"Basically," Kishore concluded, "people are planning to stay with their providers."

For more:
- see this release

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