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Cost puts off pay-TV subscribers

News, 15 June 2015

LONDON: The number of British pay-TV subscribers who plan to cancel their service has almost doubled over the past six months, according to a new industry study.

Investment bank Liberum said more than a third (37%) plan to cancel their subscription, the highest proportion it has observed since mid-2014, having risen from 20% six months ago.

The proportion of consumers planning to cancel their subscription rose 8% in the last quarter on top of a 9% increase in the quarter before that, Advanced Television reported.

While a sample base for the survey was not provided, the report stated that over two-thirds (68%) gave cost as the main reason for cancellation while about a fifth (19%) wanted to rein in household spending.

BT, the telecoms giant which is increasingly moving into entertainment and sport, has been picking up subscriptions from unhappy Sky customers, the report found.

"Dissatisfaction with Sky as a reason for switching to BT again saw a sharp rise in the quarter, up 5pp to 25%, which followed a 7pp rise the previous quarter," Liberum said.

New pricing plans for BT's packages, especially sport, could become a significant driver away from Sky, especially as 46% of Sky subscribers said they would switch to BT "if its pay-TV packages were better priced than Sky's".

However, while BT Sport has won a potentially lucrative deal to broadcast the Champions League and Europa League football tournaments, this may not be enough on its own to win over new subscribers.

According to Liberum, only 9% of pay-TV subscribers would consider switching to BT to watch coverage of the Champions League and 76% remain "reluctant" to move.

But this could change "dramatically", the report said, as BT launches it new pricing structure backing up by marketing to promote the exclusivity of the service.

Data sourced from Advanced Television; additional content by Warc staff