52% of U.S. broadband households have both pay-TV and SVOD

52% of U.S. broadband households have a subscription to both pay-TV and one or more OTT video services

Parks Associates today released the new Market Snapshot:OTT and Pay TV: Partnerships and Competition, which examines competition in the U.S. entertainment marketplace as partnerships between pay TV and OTT within the video space become more common. In this Market Snapshot, the research firm explores partnership strategies between pay-TV operators and OTT providers, which can enhance the user experience while minimizing the risks and marketing costs for each player.

“The nature of competition in video services has changed. Today, it is less about replacing competitors and more about how you complement others in the market,” said Brett Sappington, Senior Director of Research, Parks Associates. “Over one-half of U.S. broadband households have a combination of pay TV and at least one OTT service. Consumers are willing to carry multiple video accounts to get the content they want. Often they will select a preferred service with the content that they can’t do without and then select other video services that complement the high priority option.”

According to Parks Associates, 11% of U.S. broadband households watch over-the-air broadcast TV channels via an antenna, and pay-TV service subscriptions fell from 87% to 77% between 2012 and 2017. The rise of OTT correlates to a decline in viewership for live, linear TV channels. In particular, the audience for over-the-air broadcasters has diminished over time, especially among younger heads of household.

Additional research includes:

• Approximately 33% of Cord Cutters would have stayed with their service provider if offered a Netflix-style service bundled with broadcast TV channels.

• 5% of U.S. broadband households have never subscribed to a pay-TV service.

• 8% of U.S. broadband households have recently downgraded their pay-TV service and supplement viewing with video on an internet-connected device.