US cord-cutting accelerates as Netflix surpasses cable for subscribers in 2018 | Media Analysis | Business
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The annual report by PwC on streaming and pay-TV in the US has unearthed further and growing discontent regarding traditional TV services which has driven SVOD leader Netflix to overtake the cable market in 2018.

pwc 1Feb2019In its research, A New Video World Order, PwC gained Insight from more than 2,000 people in the US among industry and consumer focus groups, asking what it said are some of the most pressing questions about American consumers and their relationship with video. These included what’s driving consumption behaviour, technology downfalls and opportunities and how storytelling will evolve.

The top line findings of the report showed the that cord-cutting is carving a large hole into the US pay-TV arena. Netflix subscribers have now passed cable subscribers for the first time amounting to 76% of the sample compared with two-thirds of the TV market for cable. Moreover, 72% of pay-TV subscribers also currently use Netflix.

The data showed that there is now a convergence between older and younger generations with the former increasingly cutting the cord and accessing more video content online, while younger consumers are showing signs of positive pay-TV relationships. Specifically, 28% of older consumers (50+) have cut the cord, up from 19% in 201 and 61% of consumers aged 50 and above access TV content from the internet, compared with 48% just two years ago. Yet at the same time, younger audiences were more likely to report a healthy relationship with their pay-TV provider: 22% of consumers ages 25-34 report being “in a committed partnership” versus 16% of those 50 and above.

PwC said that it found that as the disconnect between behaviour and demographics grows, people’s video consumption habits correspond closely with their motivations for content as well as their particular interests. That is, they fell into five distinct consumer profiles: indulgists; engagers, fanatics, connoisseurs and traditionalists.

The average indulgist — a major source of revenue for both cable and non-cable companies that was driven by consumption, be it content, technology, or “stuff — has a market value of $25 billion with a monthly average spend of $70. A third d of the group wishes to watch content from brands that it likes. Traditionalists felt overwhelmed by the choices in today’s market, motivated primarily by ease and comfort. Preferring to watch live TV, traditionalists have a value of $29 billion and have an average monthly spend of $63.

Underlying the decline in traditional services, there was a feeling that technology was tarnishing user experiences. Almost 90% of consumers expressed dissatisfaction with content discovery and recommendations and; only 12% said that they were easily able to find content on streaming platforms.

Users also had a string affinity for brands. A New Video World Order found that nearly a quarter of consumers were interested in seeing their favourite brands create content while 30% wish they could custom design their own TV show.