Table of Contents
Scope and Themes
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- What you need to know
- Definition
- Data sources
- Sales data
- Consumer data
- Abbreviations and terms
- Abbreviations
- Terms
Executive Summary
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- The market
- Sales growing now, but stagnation expected ahead
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- Figure 1: Fan chart forecast of U.S. revenues of pay TV providers, at current prices, 2007-17
- TV mature, internet shows room for growth
- Comcast leads across service sectors
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- Figure 2: Video subscriptions, by company, Q1 2011 vs. Q1 2012
- Telcos to carry market growth
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- Figure 3: U.S. revenues of pay TV providers, segmented by type, 2010-12
- Market factors
- Mobile and fixed-point broadband central to future bundles
- Increasing concern about costs collides with easy access to online content
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- Figure 4: Reasons for not subscribing among those who cancelled service in past year, May 2012
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- Figure 5: Factors in carrier selection, May 2012
- Switchers primarily motivated by lower prices
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- Figure 6: Reasons for wanting to switch pay TV service, by age, May 2012
- The consumer
- High-speed internet most desired feature of service
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- Figure 7: Interest in pay TV features, by age, May 2012
- In search of higher ARPU: Premium channels, DVR, and VOD on the rise
- What we think
Issues in the Market
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- When will cord-cutting happen?
- What can the industry due to avoid cord-cutting?
- Is it really possible to police the internet?
- How can individual pay TV brands protect themselves?
- Why is DVR service at risk?
Trend Application
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- Experience is All
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- Figure 8: Reasons for wanting to switch service, by age, May 2012
- Make it Mine
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- Figure 9: Interest in selecting commercials, by age, May 2012
- Figure 10: Interest in selecting commercials, by household income, May 2012
- 2015 trends
- Brand Intervention
Insights and Opportunities
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- Segmentation based on interest in a la carte features
- Catching up with premium TV series
- Multicultural market still blossoming
- Following cellular to prepaid service
- Proprietary reality programming
- Back to the future with voice-based customer service
Market Size and Forecast
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- Key points
- Near-term growth, long-term stagnation
- Sales and forecast of pay TV providers
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- Figure 11: Pay TV sales from video subscriptions, at current prices, 2007-17
- Figure 12: Pay TV sales from video subscriptions, at inflation-adjusted prices, 2007-17
- Fan chart forecast
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- Figure 13: Fan chart forecast of pay TV sales from video subscriptions, at current prices, 2007-17
Market Drivers
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- Key points
- Faster internet
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- Figure 14: Interest in pay TV features, May 2012
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- Figure 15: Interest in pay TV features, by age, May 2012
- Figure 16: Interest in pay TV features, by household income, May 2012
- Price primary driver for switching service
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- Figure 17: Reasons for wanting to switch pay TV service, by age, May 2012
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- Figure 18: Reasons for wanting to switch pay TV service, by reasons for wanting to switch pay TV service, May 2012
Competitive Context
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- Key points
- OTT, over-the-air, stand-in for those who can’t afford cable
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- Figure 19: Reasons for not subscribing to pay TV among those who cancelled service in past year, May 2012
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- Figure 20: Reasons for not subscribing to pay TV, by age, May 2012
- Online video
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- Figure 21: Ownership and intent to purchase PCs, tablets, and cellphones for use with televisions, August 2012
- Figure 22: Connecting laptops and tablets to TVs, by age, June 2012
- Limited differentiation leads to substantial promotion
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- Figure 23: Factors in pay TV carrier selection, May 2012
- Middle-income, middle-age reach for promotions
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- Figure 24: Factors in pay TV carrier selection, by age, May 2012
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- Figure 25: Factors in pay TV carrier selection, by household income, May 2012
Segment Performance
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- Key points
- Long, slow decline for cable continues
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- Figure 26: Pay TV sales of video subscriptions, segmented by type, 2010-12
- Figure 27: Pay TV sales of video subscriptions, by segment, 2007-17
- Rising ARPU may no longer keep cable sales humming
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- Figure 28: Pay TV sales of video subscriptions from cable companies, at current prices, 2007-17
- Figure 29: Fan chart forecast of pay TV sales of video subscriptions from cable companies, at current prices, 2007-17
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- Figure 30: Cable subscribers for video, internet, and home phone, 2007-11
- 2012 possible peak for satellite sales
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- Figure 31: Pay TV sales of video subscriptions from satellite companies, at current prices, 2007-17
- Figure 32: Fan chart forecast of pay TV sales of video subscriptions from satellite companies, at current prices, 2007-17
- Telcos on the rise
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- Figure 33: Pay TV sales of video subscriptions from telcos, at current prices, 2007-17
- Figure 34: Pay TV sales of video subscriptions from telcos at current prices, 2007-17
Leading Companies
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- Key points
- Subscribership
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- Figure 35: Video subscriptions, by segment and company, Q1 2011 vs. Q1 2012
- Brands gaining share offer promotions, not the lowest price
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- Figure 36: Attitudes to pricing, promotion, and commoditization, by current service provider, May 2012
- Telcos seen as providing fastest internet
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- Figure 37: Have or would like to have “fastest home internet,” by current service provider, May 2012
- One in four wants cellphone and TV service from same provider
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- Figure 38: Have or would like to have “cellphone service from same company as TV service,” by current service provider, May 2012
- Share gainers perceived as carrying best in sports
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- Figure 39: Have or would like to have “the most sports programming” and “most foreign language channels”, by current service provider, May 2012
- Share gainers perceived as providing remote DVR usage
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- Figure 40: Have or would like to have select DVR functionality, by current service provider, May 2012
- Figure 41: Have or would like to have VOD and TV based online content, by current service provider, May 2012
- Pricing, programming, and bundling
- Comcast Xfinity
- DIRECTV
- DISH
- TWC
- AT&T
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- Figure 42: Pricing and speed for AT&T internet service, October 2012
- Verizon
- Anywhere and anytime programming: DVR and VOD service by carrier
- Comcast Xfinity
- DIRECTV
- DISH
- TWC
- Verizon
- AT&T
Innovation and Innovators
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- DISH automates commercial hopping
- Aereo provides alternative to pay TV service
- FiOS, DIRECTV revamp UIs
- Partnerships with home video services
- DISH turns Blockbuster in to service for DISH subscribers only
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- Figure 43: Dish network, “Blockbuster Movie Pass” internet ad, 2012
- Verizon/Redbox create Redbox Instant
- Netflix anyone?
- Customer service: Innovations or cost-cuts?
Marketing Strategies
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- Key points
- Overview
- Selling bundles
- Verizon FiOS pitches fiber optic
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- Figure 44: Verizon “FiOS TV and Net” television ad, 2012
- AT&T gets accepted to Julliard
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- Figure 45: AT&T U-verse “Movers $15/$15” television ad, 2012
- Century Link provides three-year guarantee
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- Figure 46: Century link “no regrets” television ad, 2012
- Promoting individual features
- Xfinity hawks VOD
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- Figure 47: Comcast Cable/XFinity On Demand, “Bridesmaids now On Demand” television ad, 2012
- Figure 48: Comcast Cable/XFinity On Demand, “American Reunion on XFinity On Demand” banner ad, 2012
- Remote home automation through Verizon
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- Figure 49: Verizon “Hectic” television ad, 2012
- Blockbuster at home part of great Dish value
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- Figure 50: Dish “rate hikes” television ad, 2012
Subscription Status
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- Key points
- Mobile broadband on the rise
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- Figure 51: Subscription to pay TV, home phone, and internet service, May 2012
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- Figure 52: Household subscribes to pay TV, by age, August 2011-March 2012
- Cord-cutting still a phantom menace
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- Figure 53: Subscription to pay TV, home phone, and internet, by age, May 2012
- TV mature, internet shows room for growth
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- Figure 54: Subscription to pay TV and home phone, by household income, May 2012
- Figure 55: Subscription to home internet and mobile broadband, by household income, May 2012
- Future plans for current services
- Majority sufficiently satisfied to stay put
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- Figure 56: Future plans for current services, May 2012
- Most age and income groups carry similar levels of interest in switching service
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- Figure 57: Potential switchers for pay TV, home phone, home internet and wireless internet services, by age, May 2012
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- Figure 58: Potential switchers for pay TV, home phone, home internet and wireless internet, by household income, May 2012
- Current service provider: Comcast leads in home and mobile internet
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- Figure 59: Service providers used for pay TV, home phone, home internet and wireless internet, May 2012
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- Figure 60: Service providers used for pay TV, home phone, home internet and wireless internet, by household income, May 2012
- Brands under consideration for change of service
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- Figure 61: Preferred pay (cable) TV service provider among potential switchers, by age, May 2012
Bundling
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- Key points
- Bundling on the rise
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- Figure 62: Penetration of bundled home communication services, July 2008-March 2012
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- Figure 63: Penetration of bundled home communication services, by household income, August 2011-March 2012
- Figure 64: Type of bundle subscription, double and triple plays, by age, May 2012
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- Figure 65: Type of bundle subscription, double and triple plays, by household income, May 2012
Premium Channels, DVR, VOD, and PPV
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- Key points
- Premium channels
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- Figure 66: Incidence of subscribing to the main premium movie channels, July 2008-March 2012
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- Figure 67: Incidence of subscribing to the main premium movie channels, by age, August 2011-March 2012
- Figure 68: Incidence of subscribing to the main premium movie channels, by household income, August 2011-March 2012
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- Figure 69: Incidence of subscribing to the main premium movie channels, by number of people in household, August 2011-March 2012
- The acronyms: DVR, VOD, PPV
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- Figure 70: DVR, VOD, and PPV penetration, July 2008-March 2012
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- Figure 71: DVR, VOD, and PPV penetration, by age, August 2011-March 2012
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- Figure 72: DVR, VOD, and PPV penetration, by household income, August 2011-March 2012
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- Figure 73: Type of DVR owned, by household income, August 2011-March 2012
Impact of Race and Hispanic Origin
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- Key points
- Multicultural groups last frontier
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- Figure 74: Subscription status, by race and Hispanic origin, August 2011-March 2012
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- Figure 75: Penetration of bundled services, by language spoken in home, August 2011-March 2012
- Possible gains in increasing DVR and premium channel subscriptions
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- Figure 76: DVR penetration, by race and Hispanic origin, August 2011-March 2012
- Figure 77: DVR penetration, by language spoken in home, August 2011-March 2012
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- Figure 78: Incidence of subscribing to the main premium movie channels, by race and Hispanic origin, August 2011-March 2012
Appendix—Other Useful Consumer Tables
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- Brands under consideration for switching service
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- Figure 79: Preferred provider, by potential switchers/plan acquirers, May 2012
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- Figure 80: Preferred provider among potential switchers/plan acquirers, by household income, May 2012
- Digital cable subscription
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- Figure 81: Access to digital cable, household income, August 2011-March 2012
- Reason for not subscribing
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- Figure 82: Reasons for not having Pay TV, by gender, May 2012
- Spend on landline
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- Figure 83: Average monthly spend on landline, by household size, August 2011-March 2012
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- Figure 84: Average monthly spend on landline, by marital status and presence of children in household, August 2011-March 2012
- Reason for changing service
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- Figure 85: Reasons for wanting to switch pay TV service, by household income, May 2012
- Subscription penetration in offline sample
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- Figure 86: Subscribes to pay TV, by household income, August 2011-March 2012
Appendix—Additional Tables on PPV/VOD
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- Figure 87: Types of VOD programs seen in past 12 months, July 2008-March 2012
- Figure 88: Types of VOD programs seen in past 12 months, by age, August 2011-March 2012
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- Figure 89: Types of VOD programs seen in past 12 months, by household income, August 2011-March 2012
- Figure 90: Types of PPV programs seen in past 12 months, by household income, August 2011-March 2012
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- Figure 91: Number of VOD programs seen in past 3 months, by age, August 2011-March 2012
- Figure 92: Number of VOD programs seen in past three months, by household income, August 2011-March 2012
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- Figure 93: Number of PPV programs seen in past 12 months, July 2009-March 2012
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Appendix—Additional Tables by Race/Hispanic Origin
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- Figure 94: Service provider, by race and Hispanic origin, August 2011-March 2012
- Figure 95: Number of VOD programs seen in past three months, by race and Hispanic origin, August 2011-March 2012
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- Figure 96: Type of DVR owned, by race/Hispanic origin, August 2011-March 2012
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Appendix—Trade Associations
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