Cord-cutters spend $85 per month on OTT services | Media Analysis | Business | News | Rapid TV News
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One of the key drivers for people cancelling their pay-TV services was the fact that they were increasingly and rapidly getting expensive, yet Parks Associates research has found cord-cutters are spending as much as $85 per month on average for their online or standalone subscription-based services, roughly $30 less than for traditional pay-TV.
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The Quantified Consumer: Cutters, Nevers, and the Rebundling of Video research examined consumer trends in unbundling video services and the recent phenomena of consumers rebundling their service portfolio because of a fragmented video content marketplace.

Parks said that the top line takeaway from the study was that cost concerns drove many consumers away from traditional pay-TV, and OTT services are delivering on the promise that they can offer desired video content at a considerably lower price point.

The study found nearly half (47%) of cord-cutters subscribe to four or more OTT services, and that in order to have an optimal video portfolio, they are creating their own video bundles by stacking OTT services. It also revealed that almost three-fifths (58%) of cord-cutters owned a smart TV, which Parks noted was roughly equivalent to the national average and showed that cord-cutters demonstrated an affinity to video content and services that make them a valuable segment for providers to target.

When compared to those who have never had a traditional TV subscription, the so-called cord-nevers, the research revealed that cord-cutters currently spend nearly twice as much monthly on OTT services as the latter cohort. Parks calculates that there are more than six million cord-nevers in the US an added that they were fundamentally less likely to own key streaming video products such as smart TVs and streaming media players.

“As they migrate away from traditional pay TV, cord-cutters seek service offerings that more closely meet their video content needs with the added value of flexibility at a lower cost,” said Parks Associates president Elizabeth Parks commenting on the Quantified Consumer: Cutters, Nevers, and the Rebundling of Video study. “OTT services have to continually deliver flexibility and customisation at a reasonable cost to keep these subscribers engaged and retain them on an ongoing basis.”