PwC Video Study Reaffirms Cord-Cutting, Skinny Bundle, OTT Trends

Like many recent studies on video consumption trends this year, a new report from PwC suggests that more TV viewers are choosing to downsize or opt out of their pay-TV services. The study, titled “Videoquake 3.0: The Evolution of TV’s Revolution,” sampled more than 1,200 U.S. consumers via an online survey in September to explore their attitudes toward video content and corresponding behavioral shifts.

According to the survey, 79% of U.S. consumers subscribe to some form of traditional pay TV. Of those, nearly one in four engaged in cord-trimming in the past year, meaning they scaled back the size of their pay-TV package. Part of this downsizing is the result of traditional providers adding “skinny bundles” to their offerings by slicing and dicing the 500-channel package into customizable and smaller pieces. The survey said the average subscriber receives 194 channels, but regularly watches only 17.

More than 16% of the respondents said they had unsubscribed from pay-TV services in the past year. That’s probably why U.S. pay-TV services lost nearly a million subscribers across Q2 and Q3 combined, according to numbers released by MoffettNathanson. But cord-nevers is perhaps the most unsettling group of all. About 5% of respondents said they have never subscribed to pay-TV services. Millennials ages 25 to 34 make up the bulk of cord-nevers, but the habits of 18- to 24-year-old consumers may be more telling. Consumers ages 18 to 24 are 67% more likely to be cord-nevers than cord-cutters, according to PwC data. The only other group in which the population of cord-nevers exceeds cord-cutters is adults ages 50 to 59, who are 78% more likely to be cord-nevers.

When it comes to SVOD subscriptions, 78% of consumers surveyed said they subscribe to at least one service from companies like Netflix, Hulu and Amazon Prime. Among pay-TV subscribers, 70% subscribe to a streaming service as well. While on-demand or OTT streaming services are appealing to consumers, there’s no single catch-all solution. Netflix leads the OTT pack with nearly two out of three Americans claiming to have a Netflix subscription. However, 52% of Netflix subscribers also subscribe to cable, and 55% also subscribe to at least one other OTT platform.

Among Hulu subscribers, the overlap is even more staggering. Some 91% of Hulu subscribers subscribe to at least one other OTT platform, more than doubling the number of Hulu subscribers who also subscribe to pay-TV. Amazon Prime subscribers have a similar profile, with 79% subscribing to at least one other OTT platform, and 53% subscribing to cable. “This means that in the battle for market share, OTT services are a threat to cable—but not necessarily to each other,” the PwC report said.

When cord-cutters were asked what would get them to re-subscribe to pay-TV, 56% of the respondents listed “being able to customize my package to exactly the channels that I want” as their number-one motivator. Even loyal pay-TV subscribers recognize a need unfulfilled. When asked about their ideal pay-TV package, 45% said they most preferred an “a la carte” package of channels that they could customize themselves.