More People Are Ditching Pay-TV, But The Reasons for Doing So Are Regional

Dimitar Serafimov | Mon Jul 30 2018 | Industry insights

Global pay TV challenges and differences

While OTT is reaching a tipping point and pay TV numbers are going down, there are distinct cultural drivers for people ditching pay-TV in their droves.

We have documented the growth and evolution of online streaming for some time - and now it looks like we may be reaching a tipping point in which online viewing is starting to surpass pay-TV - but this trend does differ between regions.

In fact, a study from Ofcom has discovered that the average daily broadcast viewing on a television set dropped by nine minutes last year in the UK alone.

In the UK, SVoD subscriptions climbed to 15.4 million in Q1 of 2018, in comparison to pay-TV's 15.1 million.

This chart offers a visualization of SVoD growth in the UK over a four-year period:

UK SVOD subscribers trend Source: Ofcom

As you can see, the growth in UK SVoD subscribers has been exponential. And in the UK, there seem to be the key reasons for this rise in online viewership:

  • 19% of people say that they’ve seen something offensive on TV. To avoid this, more viewers have the desire to take control of the programming they watch.
  • More people are craving original SVoD productions.
  • An increasing amount of 16 - 34-year-olds are watching YouTube, and on mobile devices.

Now let’s venture across the pond.

A new study suggests that five million Americans will jettison pay-TV this year - this equates to a rather sizable 685% increase from 2016.

Again, these findings show us that in the US, more and more consumers are beginning to favor the freedom, autonomy, and flexibility of SVoD over traditional pay-TV, but what are the reasons? Here are some of the main drivers for this mass migration:

  • A frustration with rising prices.
  • Having to pay for redundant channels that are of no interest.
  • A rising frustration at new customers getting access to better deals.
  • Poor value for money.

These reasons mainly apply to most of the APAC and the rest of developing markets.

It seems that while both of these notable viewing regions are reaching a tipping point, there are distinct cultural drivers for people ditching pay-TV in their droves. While in the UK, the shift away from pay-TV is centered on a lust for tech-innovation and a desire for fresh, original programming, in an addition to the desire to consume content on an ever-growing range of mediums, in the US, it’s far more focused on value.

In America, the pay-TV providers are perceived to offer little value for money and many providers are driving up their subscription prices rapidly, causing consumers to move into the realms of SVoD - it’s a real ‘cut your nose off to spite your face’ situation.

Now, whatever the regional motivations for this international tipping point may be, the fact is: SVoD is on the up and for providers with an innovative, forward-thinking attitude, there is absolutely everything to play for - and that’s a wonderful thing indeed.

Learn more on the importance of happy viewers in the OTT era:

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