Scatmag.com

August 2019

US CORD-CUTTERS WANT $21 PACKAGE


THE US MARKET

The number of Cable TV & DTH subscribers in the USA has been declining steadily, as subscribers shift to OTT platforms to receive fewer channels at lower prices. These 'cord-cutters' do not want to pay $60 to $100 per month currently charged by DTH & cable TV platforms.

Only 66% of U.S. households currently subscribe to Pay DTH & Cable TV. This is down an alarming 10% from just 2 years ago, according to PricewaterhouseCoopers.

The Convergence Research Group predicts another 4.56 million domestic households will cut their cable or satellite cords in 2019 alone.



CURRENTLY $37

Many Americans who stream media pay for $37 per month for 3 OTT services, collectively.

According to the poll, this price is an impediment for more consumers to shift to streaming their TV channels.


CORD-CUTTERS' PRICE

So how much are cord cutters willing to pay? A recent poll by Hollywood Reporter/ Morning Consult finds that US cord-cutters would ideally pay only $ 17 to $ 21 per month, as a combined fee for all their monthly OTT subscriptions. A price of $ 17 would be 'too good to be true' while $ 27 would be 'too expensive' for the national sample of 2,200 adults polled. Interestingly, various demographics do not vary too much in their answers in the survey.






WAKE UP CALL

The poll results come as unwelcome news for WarnerMedia, since it plans to launch its 'HBO Max' OTT for $17 a month.

The poll will serve as a wakeup call to others like Disney, Apple & NBCUniversal who also plan to launch their streaming TV services shortly. Disney is likely to launch a low-priced package at just $ 7 per month - far lower than other services.


LOW AWARENESS OF STREAMING

New streaming platforms will have to invest significantly in creating an awareness of their services.

26% of adult Americans have heard nothing at all about Disney+, which is only a small improvement from 30% who said the same 7 months earlier.

35% of American adults have heard nothing of Apple's upcoming product. 40% have not heard of WarnerMedia's plans and 46% have not heard of NBCU's proposed service. Maybe the poll is correct - public interest will pick up only if streaming prices fall significantly from the existing $ 37 to $ 21 per month.


CONCERN FOR NETFLIX

Netflix - the first video streaming service grew rapidly in the past. The number of Netflix subs in the U.S. exceeded the number of cable TV subs in mid 2017.

In January 2019 Netflix raised its subscription price in the US by $ 1 to $ 2 per month, depending on the plan. New prices range from $ 9 to $16. This price hike received a strong 'Thumbs Down' from US subscribers.

Netflix revealed; this July; that it lost 1,00,000 subscribers, the first time in its history. The revelation knocked $17 billion off its stock value in a single day!

Clearly, Cord Cutters in the USA are very price sensitive, and will exit if provoked. n