According to the report “Choosing Content: Viewing Video” by Parks Associates, “17 percent of premium cable channel customers and 16 percent of video-on-demand pay-per-view customers would consider using an online subscription service such as Netflix Watch Instantly instead of their current viewing choice,” reports Digital Trends.
Netflix receives higher customer satisfaction ratings because it has more material available and boasts a lower price point.
“Consumers can pay for a month of Netflix for about the same amount as for two pay-TV VOD movies. Parks Associates research shows consumers know the quality of the [subscription] service is not comparable to pay-TV quality, but the cost-benefit comparison is enough to affect their purchase decisions,” notes Brett Sappington, director of research for Parks Associates.
In a related Forbes article, Mark Rogowsky argues that while cable purchases used to be the norm when moving into a home or apartment, today’s younger generations skirt the system using Internet television solutions and illegal websites.
“Given that excess disposable income doesn’t appear headed for the wallets of twentysomethings in the U.S. anytime soon (and even if it were, it’s not clear they’d rush to sign up for cable),” writes Rogowsky, “there’s a real possibility that over time, multichannel penetration in the U.S. will drop off meaningfully from the current 90-plus-percent level as the current customers die and the prospective new customers don’t automatically opt in.”
Digital Trends suggests that cord-cutting may soon become less of a concern for television companies than consumers who never establish cords to begin with: “It’s not that people will give up their television for the Internet, but if the Internet can convince people who’ve never really had a cable subscription before that they don’t even need one… Well, that could be a real problem.”
According to the report “Choosing Content: Viewing Video” by Parks Associates, “17 percent of premium cable channel customers and 16 percent of video-on-demand pay-per-view customers would consider using an online subscription service such as Netflix Watch Instantly instead of their current viewing choice,” reports Digital Trends.
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