Consumers far more likely to recommend online than traditional pay-TV services

Wednesday, November 28th, 2018 
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Consumers are far more likely to recommend online pay-TV than traditional pay-TV services

  • Parks Associates study shows positive NPS for online pay TV, negative for traditional pay-TV

DALLAS — New U.S. consumer data from Parks Associates finds the average NPS (net promoter score) for traditional pay-TV providers in 3Q 2018 is -19. 360 Deep Dive: Churn and Retention in Pay TV notes this NPS represent a slight drop for pay-TV providers, which scored -15 in 1Q 2018, although some providers such as Optimum and DISH improved their individual scores. By comparison, the average NPS for the major online pay-TV and OTT video services is positive, although their overall scores declined from 2017 to 2018. Net promoter score measures willingness to recommend a service and is widely used to assess consumer perception of services and providers.

Factors Influencing Decision to Make a Pay-TV Change | Parks Associates

“The percentage of U.S. broadband households that do not subscribe to traditional pay TV increased from 16% in 2011 to 22% in 2017,” said Brett Sappington, Senior Director of Research, Parks Associates. “With each quarterly earnings report, pay-TV providers and their stakeholders are hyperaware of variances in subscriber figures, and they are trying to reverse this trend with their own brands of OTT services as well as other value-added services. A positive NPS score for these services suggests a positive perception and strong word-of-mouth activity.”

360 Deep Dive: Churn and Retention in Pay TV examines the current state of churn among pay-TV providers, with a specific look at cord cutting, cord nevers, the impact of new OTT video services and skinny bundles, triggers to churn, and effective retention tools.

“A key challenge for pay-TV providers is to design and launch services that will inspire loyalty among younger households,” Sappington said. “Older consumers profess higher loyalty to pay-TV providers, whereas younger households are more likely to have an OTT service.”

Additional research includes:

  • 79% of U.S. broadband households reported having traditional pay-TV subscriptions in early 2018.
  • Approximately one third of pay-TV subscribers made a change to their service between 1Q 2017 and 1Q 2018.

Links: Parks Associates