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TV viewers build bespoke bundles

News, 12 April 2017
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LONDON/NEW YORK: Consumers are spending more than ever before on TV services as viewers build bespoke bundles of TV, VOD, and SVOD, rather than leaving their pay TV providers, according to a new report.

A study by market analysts Ampere Analysis, based on a survey of 53,000 internet users from North America and Europe over the past 18 months, revealed that 'cord-cutting' is not yet an option for most people.

But there is no room for complacency, Richard Broughton, the firm's research director, told Digital TV Europe. "There are warning signs,"

Those include the increasing spend per viewer: in 2016 average subscription TV spend in North America was revealed to be $311, an increase of $30 per person per year compared to 2011.

In Western Europe, partly due to the prevalence of public broadcasters such as the UK's BBC, average consumer spend was lower at $95.

Broughton suggested that pay TV operators needed to broaden their offering to a "watch everywhere" SVOD model and to maintain investment in exclusive content if they wish to "avoid being left behind by more flexible competitors".

The catalysts for this change are the US giants Amazon and Netflix, responsible for over half of SVOD contracts in the markets surveyed by Ampere.

The reason for doubling-up, the study found, was a lack of overlap, as competing services rarely show the same titles. In the UK and Germany this issue is particularly visible, it said, as 94% of titles are exclusive to a single service.

Yet the attraction of SVOD poses a real threat, said Broughton: "Our research has found that consumers who are doubling-up on their TV services, combining their pay TV service with one or more SVOD services, are twice as likely to be strongly considering leaving their main TV provider in the next six months."

The proportion of users subscribing to VOD alone remains small, though it is increasing. Homes using on-demand as their only platform rose from just 5% of internet users in 2015 to 13% in Q1 2017.

However, the number of households opting for pay TV alone or a combination of pay TV and an SVOD service remains relatively stable at 70% of respondents across the territories.

"While a degree of cannibalisation of subscription TV services is undoubtedly occurring as some consumers decide to cut the pay TV cord, the general trend is for more, not less, access to television services," Broughton concluded.

Data sourced from Digital TV Europe; additional content by WARC staff

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