Prices Driving Video Consumption, Survey Finds

10 Feb, 2010 By: Erik Gruenwedel

Pricing for premium movie channels and video-on-demand among cable operators, telcos and satellite carries has increasingly become a deciding factor among consumers evaluating offerings from competing suppliers, according to a new report.

Indeed, about 30% of respondents in a survey said they switched providers due to price issues regarding video services, said research firm Light Reading. Another 45% said they chose their current provider because they received a special offer or discounted service.

Regardless of pricing, recessionary factors continue to impact video consumption among cable operators. Both Time Warner Cable and Comcast, the top cable operators in the country, each reported quarterly declines of about 200,000 subscribers for premium channels, including VOD.

"I have to imagine that the continued proliferation of Redbox kiosks and Netflix offerings is drawing consumers looking for cheaper alternatives that are just about as convenient as VOD," said Eric Wold, director of equity research with Merriman Curhan Ford in New York.

Edward Woo, research analyst with Wedbush Morgan Securities in Los Angeles, said consumers have lots of entertainment options when looking at costly cable bills each month.

"Rental kiosks are growing like crazy, the recession is still ongoing and free content still abounds through Hulu," Woo said.

Light Reading also found that 19% of respondents said they would consider choosing a telecommunications provider as their next video supplier, up from 13% in a 2008 survey.

Verizon's upstar FiOS TV service, which carries Epix movies, is carried in about 6 million homes.