The majority of consumers in the U.S. and Canada are no longer
interested in hefty pay TV packages filled with channels they
don’t watch. According to a new study from TiVo out this morning, 77.3
percent now want “a la carte” TV service – meaning, they want
to only pay for the channels they actually watch. And they’re
not willing to pay too much for this so-called “skinny bundle,”
TiVo found. The average price a U.S. consumer will pay for
access to the top 20 channels is $28.31 – a figure that’s
dropped by 14 percent over the past two quarters.

In Canada, the average price consumers will pay is $25.56,
which is down by 20.1 percent over the past two quarters.

TiVo’s findings are based on larger study of video trends
across North America, which involved a survey of 3,081
respondents over the age of 18 in Q1 2017. The majority of
respondents in the study (84.8%) reported they still had pay TV
service, but the number of those who said they had cut the cord
(21.8%) had grown by 4.4 percent from TiVo’s report a year ago.

Around half of the cord cutters (45.6%) said they use an
antenna to get their basic channels, and an even larger
majority (57.6%) said they’re using an internet streaming
service like Netflix, Hulu, or Amazon Video.

What’s more notable is that the subscribers to these
over-the-top services are climbing. They’re also spending more
of their time binge watching their way through their shows, and
getting addicted to their original content.

Not only did the number of over-the-top and subscription
service subscribers increase by 10 percent since the last
quarter, those who said they prefer to binge shows was also up
by over 8 percent. Meanwhile, 14.6 percent said that most of
the TV viewing was original programming on streaming services –
an indication that the investments companies like Netflix, Amazon and Hulu are making into their own content is
now paying off.

TiVo’s study attempted to determine what’s driving cord
cutting, as well. This follows a comScore report from earlier this week,
which pointed towards financial reasons, as well as a desire to
just watch less television in general, among U.S. cord cutters.

The TiVo report generally backed up those findings, noting that
people’s biggest reason for cutting the cord was the price of
pay TV. Nearly 80 percent said that pay TV is just “too
expensive.”

Unbelievably, 37.1 percent of the survey’s respondents said
they were spending at least $101 per month — with some spending
more than $150 per month — on pay-TV services alone.

In addition to price concerns, streaming service users seem to
be drawn to the newer, more personalized format for discovering
programming, as compared with the traditional TV guide. For
example, 57.7 percent of Netflix users take advantage of the
profile option that gives family members their own profile with
personalized recommendations and watchlists. 40.7 percent said
they liked suggestions that were based on what they had
previously watched.

“Not only are pay-TV providers slow to roll out recommendations
on set-top boxes, the majority of content recommendations
delivered to date…have not been personalized to the viewer,”
the report noted. “Rather, the content recommendations shown in
pay-TV offerings today seem to be based on popularity of
content or ‘More Like This’ (similarities between types of
content).”

This lack of personalization could be helping to push consumers
further away from pay TV, in favor of streaming services.

Perhaps because of the rise of streaming services, respondents
also said their ideal TV lineup now only includes 19 channels,
which they’d pay for at a rate of just $1.62 per channel, on
average. The top five requested channels were ABC, CBS, NBC,
Discovery Channel and History – the same lineup Q2, Q3, and Q4
2016, and now, Q1 2017. What’s funny is that being able to
access broadcast stations is something that’s difficult to do
today through live TV streaming services due to affiliate
licensing agreements that limit their distribution.

TiVo’s report comes alongside other industry news that
indicates that the size of the broadband market has now reached
the size of the pay TV market,
here in the U.S. That could
push larger providers to raise the cost of broadband, to make
up for the declines in the number of pay TV subscribers. The
full report is available here. 

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