Consumers Prefer 'à La Carte' TV Networks27 Mar, 2017 By: Erik Gruenwedel
Survey underscores popularity of low-cost SVOD services
As expected, consumers increasingly want to pay only for the TV networks they watch, according to new data from Hub Entertainment Research.
The rise in standalone online TV networks targeting broadband-only consumers and people dropping traditional bundle pay-TV service (“cord cutters”), underscores the reality consumers don’t want to pay for channels they never watch.
In its study, “Let’s Get Ready to Bundle,” Hub Entertainment surveyed 1,500 respondents who said they watch at least five hours of TV a week.
More than half (53%) preferred a pure à la carte approach — where consumers pick the networks they want, and pay for each one individually. Only 38% of respondents find the current traditional bundle appealing — subscribing to tiers or groupings of networks, including networks they watch and networks they don’t watch.
Respondents were asked to pick from a list of 77 TV brands, in addition to three major SVOD services: Hulu, Netflix and Amazon Prime Video. The average respondent chose 19 TV networks and at least one SVOD service. ABC was the most often chosen TV network, followed by CBS, Fox and NBC.
“The current bundled-network approach to TV service gives consumers access to a fairly large number of networks they never watch, networks they assume they’re paying for,” Peter Fondulas, co-author of the study, said in a statement. “And in their mind, paying for something they don’t use is an instant sign of poor value. They instinctively see à la carte as an ideal solution.”
Yet, when respondents were given the same list with price points ranging from $4-$7 for broadcast and basic cable networks, $8-10 for premium networks, $10-$15 for each SVOD, and $20-$25 for sports networks, the list of preferred networks dropped to nine — at about $66 per month.
Notably, nearly 50% of respondents chose at least one SVOD, with Netflix the most-selected brand.
“In an exercise like this, [respondents] see that per-network prices can add up quickly — and severely limit their viewing choices,” Fondulas said.
Co-author Jon Giegengack said the results underscore the fact consumers aren’t as concerned as much about price as they are what they’re paying for.
“This is an environment where SVODs — as aggregators with both original content and shows from other networks — provide especially good ‘bang for the buck.’ So it’s interesting, but not surprising, to see so many consumers include them in the bundles they’d build themselves if they could,” Giegengack said.