Pay TV Subscribers Not Yet Ready to Cut the Cord

The collective whisper amongst would-be cord cutters is pervasive — many consumers suggest that paying a monthly premium for channels and content they aren't regularly consuming has heightened the urge to switch to streaming platform services like Apple TV, Netflix, or Hulu. Although your regional cable provider faces a continuously difficult challenge in keeping customers and generating revenue, the pay TV market is not expected to meet its end anytime soon. In fact, its subscriber base is projected to grow at a steady pace to over 1.1 billion in 2024. 

Primarily in North America, lower monthly costs and specialized content choices have driven cable, satellite, and IPTV service subscribers toward video streaming services to the tune of 1.2 million during the first quarter of 2019. High-speed broadband penetration and consumers' ability to utilize multiple streaming platforms have also contributed to the decline in pay TV subscribers. With the fixed broadband market expected to exceed 1 billion subscribers by year's end, faster download speeds are making cord cutting a no-brainer decision for some. Traditional providers are countering with their version of a la carte pricing and content, but subscribers are also frustrated at having to choose one content category (sports) over another such as kid-friendly entertainment. 

In Which Markets Will Pay TV Continue to Thrive?

In emerging markets outside of North America, the instability of price points, content choices, and video quality, over-the-top delivery platforms will not surpass traditional pay TV, despite the global increase of home broadband adoption rates. 

In an attempt to meet the streaming demand, pay TV operators have introduced live streaming services, which provide lower cost compared to standard cable or satellite packages. Android's set top box (STB) has introduced a way for pay TV providers to integrate streaming services into their business model. Although subscribers in emerging markets have not been as quick to cut the cord, pay TV operators have quickly embraced Android STBs — with Airtel and Hathway, both based in India, and Indonesian company Telkom being prominent examples. 

Using Analytics and AI for Customer Retention

Streaming service and pay TV providers aren't just leaning on improved hardware to keep subscribers engaged. Analytics solutions based on Artificial Intelligence and machine learning algorithms are providing even greater insight on what customers are watching, when and how often content is consumed, and prediction of churn. Such information becomes helpful with customer retention by allowing providers to recommend targeted content and offer appropriately packaged services, as well as explore ways to improve the overall experience by way of the user interface.

Our corresponding market data report, Pay TV Subscribers, which presents a detailed outlook for subscription trends across mature and emerging markets. This research is part of ABI Research's Video & Cloud Services technology service, which you can subscribe to for comprehensive data and analysis on the end-to-end video ecosystem.