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Steady Fee Hikes Put Off Pay TV Subs

Many Americans Consider Pulling the Plug: Digalsmiths Survey 3/03/2013 7:00 PM Eastern

Cord-cutting rage may not have inflicted a deep wound on the industry yet. But millions of Americans say they are considering pulling the plug on pay TV, with many citing price increases as the splinter of their discontent.

Only 0.8% of subscribers surveyed said they canceled their cable or satellite-TV service in the last 12 months, according to a survey commissioned by video search and discovery vendor Digitalsmiths.

But within the next six months, 1.3% of current pay TV customers said they plan to switch to an online service like Netflix in lieu of cable or satellite, while 4% said they simply plan to drop pay TV altogether, the Digitalsmiths survey found.

The survey found that about 80% of pay TV customers are satisfied with the value provided by their current provider.

Of the 20% of respondents who were dissatisfied, 68% cited increasing fees as a reason they were unhappy. About 45.5% of all pay TV customers said their cable, satellite or telco TV bills were higher than a year ago; 38.9% pay about the same; and 16.6% said their bills had gone down.

Pay TV providers are acutely aware of the issue and are struggling to find ways to address it, as evidenced by Cablevision Systems’ antitrust lawsuit filed last week against Viacom (see Cover Story, page 6).

Besides rate increases, unhappy pay TV customers also blamed “bad channel selection” (34%); poor TV quality (34%); and bad customer service (30%) for their dissatisfaction. Other less-cited reasons included “having to pay for hundreds of channels I don’t watch” and a poor user interface.

The online survey polled about 1,850 adults in the U.S. and Canada aged 18 and older between Jan. 25 and Feb. 1. Digitalsmiths commissioned the survey from a “major” third-party research firm, which a spokeswoman declined to identify.

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