Pay TV Providers Hanging On With Online Partnerships

Parks Associates research reveals growth in Pay TV/streaming service packages
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So much for pure cord cutting.

New research from Parks Associates shows that 21 percent of U.S. pay TV subscribers subscribe to an online video service through their pay TV provider, up from 10 percent a year ago.

The research firm attributes this jump to the increasing number of partnerships between pay TV and OTT providers, with operators such as Comcast adding support for Netflix in their set-top boxes.

Other insights from Parks Associates' new consumer study include:

• pay TV subscription rates dropped from 86 percent in 2015 to 77 percent in late 2017;

• 84 percent of pay TV subscribers have service from a traditional cable, satellite or telco provider; and

• nearly 18 percent of pay TV households have a subscription package from an online video service, e.g., Sling, or a traditional provider now offering an online video bundle.

"The number of 'cord never' households (which have never had pay TV service) is increasing slowly, but those who have sampled pay TV are testing new alternatives," said Brett Sappington, Parks senior director. "The percentage of those open to cancelling pay TV or minimizing their monthly spend on pay TV is also up. This ongoing shift is affecting all aspects of service design, promotion, packaging, and pricing. As a result, operators are having to reassess their technology and content investments as well as their partnerships and go-to-market strategy."

Parks Associates will reveal more findings from its research and will address the changing dynamics of the pay TV market at a research workshop, Survivor's Guide to the New Video World, on May 14 in Denver, at The Pay TV Show.

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