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Study: 77% of Consumers Want Skinny TV Channel Bundle

2 Dec, 2015 By: Erik Gruenwedel

At a time when the pay-TV industry is dealing with subscriber cord-cutting, a new study suggests consumers increasingly want to pay only for the channels they watch.

Nearly 77% of 3,150 respondents in a third-quarter poll conducted by Digitalsmiths said they would prefer an à la carte channel model, which was up 2.7% from a previous-year study.

The report found respondents chose 17 to 18 channels (from a selection of 75) — with ABC, NBC, CBS, Discovery Channel and History Channel among the top five picks. The average price they would pay monthly for the skinny bundle was $40.50.

With 63% of respondents familiar with the rollout of over-the-top video services this year, including online TV platforms, the most well-known (besides SVOD stalwarts Netflix and Amazon Prime Instant Video) is Hulu Plus with 53.1% awareness.

Runner-up HBO Now had 32.4% awareness (up 1.2% from Q2), followed by Showtime OTT (16.7%), Sling TV (12%), CBS All Access (11.9%) and PlayStation Vue (8.9%).

Interestingly, 37% of respondents said they were unfamiliar with any of these services.

A separate study from Duluth, Ga.-based Clearleap found more than 71% of respondents said they had used a streaming service either previously or currently with their pay-TV service.

A expected, millennials (aged 18-29) are driving the OTT growth, with 70% using a streaming service, while 64% have a cable subscription. Additionally, 26.5% of respondents said they have never subscribed to cable, confirming speculation that younger viewers don’t have the same attachment to linear and pay-TV as their parents or grandparents.

Notably, when asked if they would be willing to pay slightly more for their content choices, 42.6% of current streaming-service users indicated they would pay $10 to $25 per month, which is higher than what Netflix, Hulu and Amazon charged at the time the July 2015 survey was conducted.

Digitalsmiths said that while overall awareness of OTT video is high, true consumer adoption remains challenging to track as media companies have thus far not disclosed actual subscriber data. Indeed, Dish Network is combining Sling TV subs with its satellite TV sub data.

While pay-TV operators and media companies attempt to circumvent cord cutting with OTT video, Digitalsmiths found that 63% of respondents consider themselves “cord cheaters,” a phenomenon whereby pay-TV subs seek video content from alternative sources, including rental kiosks, transactional VOD and Digital HD.

Indeed, 55.1% of pay-TV subs use an OTT video service, while 35.3% also use a third-party rental service. More than 27% use both video alternatives.

Notably, when asked what distribution alternative most appealed to pay-TV subs, OTT video (78.2%) ranked highest due primarily to the ease of finding content to watch. Transactional VOD and Digital HD followed at 66%, followed by linear TV at 58%.

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