World’s Cable Consumers Retain Their Connection

by Yoeri Geutskens on Oct 30, 2015 8:48:10 AM

U.S. consumers love watching TV. Their average consumption of five hours daily leads the world. Yet, American cable TV operators are in the customer satisfaction cellar. Perhaps it’s the pricing. The average U.S. viewer pays $123 per month for a package of 189 channels of which s/he regularly watches just 17.

Of course, channels do not come à la carte in the U.S.; they are bundled. In addition, programmers charge cable operators re-transmission fees for the privilege of transmitting their channels. ESPN, for instance, requires cable operators to keep them in the basic package and litigate against any operator that tries to add their content into a premium offering. Thus, consumers end up supporting sports broadcasting whether they like it or not, and in so doing, enable ESPN and programmers like them, to spend more on sports rights.

Cable and OTT connections

Most market areas in Europe, though, as well as many other parts of the world, have a single cable operator. This may appear to limit choice, but it doesn’t. European consumers pay between $10 and $50 per month for a cable TV package, depending on the country they live in, and often get their TV services as part of a triple-play or quadruple-play bundle together with broadband, fixed line telephony and even a mobile subscription.

On the OTT side, U.S. content providers allow streaming, even though it typically requires a cable subscription for authentication. Fortunately, this is a restriction that is virtually unknown in Europe. There, content is gradually being made available via OTT VOD services with only a broadband subscription required.

From a global perspective, it is a well-documented fact that millennials are less inclined to watch linear TV, no matter where they are. But market data shows that they tend to enjoy a combination of both linear pay-TV and OTT offerings. Moreover, recent PwC/Ovum projections show a decline in North American TV subscriptions in 2016, but a distinct rebound forecast for 2018, going into 2019.

All of this suggests that the world is on a course of convergence rather than conflict, albeit fragmented and uneven.

While some countries like the U.S., the Netherlands and Belgium rely largely on cable, others such as the U.K., Germany and France have moved to a mixture of terrestrial, satellite and cable distribution. Despite the differences in how content is deployed, or the challenges inherent in its deployment, a lion’s share of both U.S. and non-U.S. consumers are likely to retain their cable connection because as of yet, they’ve been given no definitive reason not to.

 

Yoeri Geutskens is Product Marketing Manager at SeaChange.

 

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