Skip to main content

Pay-TV High Cost Continues to Drive Shrinking Demand

Video entertainment demand has been evolving rapidly. Yet traditional pay-TV service providers are still challenged to address the needs of more progressive consumers. Case in point: subscriber awareness of their "TV Everywhere" offerings -- the ability to watch programming from their pay-TV provider on devices other than a TV -- remains low at 36 percent, which is unchanged since 2013.

Meanwhile, pay-TV marketers are attempting to capitalize on another growing trend. Skinny bundles, TV subscription packages composed of selected channels targeting specific customer segments, have the potential to attract elusive younger consumers to pay-TV, according to the latest market study by Altman Vilandrie & Company.

However, their survey also finds that two-thirds of older consumers, typically the most loyal subscribers of legacy pay-TV, say they are wasting money for channels they don’t use -- so, skinny bundles could cannibalize the service provider's existing subscriber base.

Skinny Bundles Market Development

Skinny bundles are designed to appeal to younger viewers, who have come to expect more consumer choices and flexibility, with targeted, affordable packages.

Nearly 70 percent of non-subscribing 18-24 year-olds -- more than any other age market segment -- agree that they would consider subscribing to pay-TV if there were "more affordable channel lineups that fit my viewing tastes."

The traditional pay-TV industry is anxious to appeal to young consumers, who subscribe at much lower rates than other age groups. This market segment includes both cord-cutters, who have dropped pay-TV, and cord-nevers, who have never subscribed (and likely never will, given the current cost of pay-TV services).

"The surprising level of dissatisfaction with unwanted channels we found among older subscribers shows the difficult balancing act skinny bundles create for pay TV providers," said Jonathan Hurd, director at Altman Vilandrie & Company. "It is critical for providers to design optimal bundles that maximize adoption of new subscribers while simultaneously limiting appeal to existing customers – no small task, based on simulations we've run using the survey findings."

Skinny bundles of live TV channels from internet providers Sling TV, PlayStation Vue, and soon Hulu seek to target price sensitive consumers who are comfortable watching online video. But Dish’s new Flex Packs have extended the skinny bundle concept to traditional pay-TV.

Skinny bundles may end up attracting older consumers disproportionately: 63 percent of pay-TV subscribers aged 55 and older -- more than any other age range -- agree that they are "wasting money because my pay TV service includes many TV channels that my household does not watch."

Outlook for Pay-TV Subscriber Growth

And yet, this age group is far less likely to switch to online video services -- only 30 percent watch TV shows or movies online weekly -- but may end up downsizing to skinny bundles that include traditional pay-TV channels.

The survey confirmed that young consumers turn to more economical online video options rather than traditional pay-TV services. Seventy-five percent of 18-34-year-olds watch online video from Netflix, Amazon Prime, or Hulu Plus at least once per week -- that's far more than the 22 percent of consumers age 55 and above.

And the trend among younger consumers toward online sources continues to grow. In a typical week, nearly 80 percent of 18-24-year-olds watch TV shows or movies on the Internet -- that's up from 60 percent five years ago.

Popular posts from this blog

Industrial and Manufacturing Technology Growth

In an evolving era of rapid advancement, market demand for innovative technology in the industrial and manufacturing sectors is skyrocketing. Leaders are recognizing the immense potential of digital transformation and are driving initiatives to integrate technologies into their business operations.  These initiatives aim to enhance efficiency, reduce costs, and ultimately drive growth and competitiveness in an increasingly digital business upward trajectory. The industrial and manufacturing sectors have been the backbone of the Global Networked Economy, contributing $16 trillion in value in 2021. Industrial and Manufacturing Tech Market Development   This growth represents a 20 percent increase from 2020, highlighting the resilience and adaptability of these sectors in the face of unprecedented challenges, according to the latest worldwide market study by ABI Research . The five largest manufacturing verticals -- automotive, computer and electronic, primary metal, food, and machinery -

Rise of AI-Enabled Smart Traffic Management

The demand for smart traffic management systems has grown due to rising urban populations and increasing vehicle ownership. With more people and cars concentrated in cities, problems like traffic congestion, air pollution, and greenhouse gas emissions are pressing issues. Since the early 2000s, government leaders have been exploring ways to leverage advances in IoT connectivity, sensors, artificial intelligence (AI), and data analytics to address these transportation challenges. The concept of a Smart City emerged in the 2010s, with smart mobility and intelligent traffic management as key components.  Smart Traffic Management Market Development Concerns about continued climate change, as well as cost savings from improved traffic flow, have further motivated local government investment in these advanced systems. According to the latest worldwide market study by Juniper Research, they found that by 2028, smart traffic management investment will be up by 75 percent from a 2023 figure of

AI Software Market will Reach $251 Billion

The growth in Artificial Intelligence (AI) software could lead to many benefits. As more organizations adopt AI, they may become more efficient, productive, and able to offer improved products and services. The global job market could also expand, with demand growing for roles like AI engineers and technicians. Plus, AI apps could enable breakthroughs in fields like healthcare, transportation, and energy. The worldwide AI software market will grow from $64 billion in 2022 to nearly $251 billion in 2027 at a compound annual growth rate (CAGR) of 31.4 percent, according to the latest market study by International Data Corporation (IDC). AI Software Market Development The forecast for AI-centric software includes Artificial Intelligence Platforms, AI Applications, AI System Infrastructure Software (SIS), and AI Application Development and Deployment (AD&D) software (excluding AI platforms). However, it does not include Generative AI (GenAI) platforms and applications, which IDC recent