Tuesday, April 4, 2017

New study finds consumers want to pick only the TV channels they want to watch - until they find out how much more it will cost.

Fascinating new pay-TV research has found that television subscribers want to pick and choose their own TV channels - until they find out how much more they will have to pay.

In South Africa, DStv and StarSat subscribers of the pay-TV offerings of MultiChoice and StarTimes Media South Africa as well as subscription television customers elsewhere in the world, have been vocal about not wanting to pay for a bundle of TV channels but rather a so-called "a la carte" offering where every subscriber gets to choose certain channels and only pay for those.

Currently the traditional pay-TV ecosystem works like a gym: a general monthly fee gives members access to the treadmill, pool and weights, lowering the overall price, whether someone uses everything or just one machine.

Instead of a restaurant buffet, pay-TV consumers can't understand why they're not allowed to "dine" on their television in a sit-down a la carte way, with a waiter bringing an itemised bill for every channel consumed.

A new consumer study under American TV viewers by Hub Entertainment Research entitled "Let's Get Ready to Bundle", has found that 53% of pay-TV subscribers want to choose the individual TV channels they want to pay for in an a la carte model. 

An interesting thing however happens when actual approximate TV channel values and prices are attached to individual channels and when it becomes clear to people how much more they will actually have to pay for individual channels, priced separately.

Consumers' big argument is that they are being forced to pay for TV channels they don't watch or want to watch, and that they will be saving and paying less if they can choose just the channels they want.

Hub Entertainment Research decided to test it and showed people 77 TV content and channel brands, including streaming services like Netflix, Hulu and Amazon Prime Video. 

The study was conducted under 1 500 people who watch at least 5 hours of TV a week.

When asked to simply choose the channels they would want in their ideal pay-TV bundle, the average person included in the study chose 19. Also noteworthy is that 70% included at least one streaming service like Netflix as a must-have.
Hub Entertainment Research then did a second take, and added an approximate monthly TV subscription fee next to each channel or service.

This ranged from $4 (R55) for cheap channels to $7 (R96) for premium channels, $10 to $15 (R206) for streaming services and  $20 to R25 (R343) for a premium sports channel - with a overall total amount attached.

In South African terms that would be asking people to choose between channels and services like SABC2, StarTimes One, Mzansi Magic, The Travel Channel, E! and M-Net, to the likes of ShowMax, Netflix and SuperSport.

Interestingly the number of channels that consumers now chose, dropped from 19 to just 9.

The cost of the average monthly bundle consumers chose, worked out to $66 (R906) per month. The number of people who chose to include a streaming service dropped from 70% to 48%.

"The current bundled approach to TV service gives consumers access to a fairly large number of networks they never watch, networks they assume they're paying for," says Peter Fondulas, co-author of the study, in a statement.

"In their mind, paying for something they don't use is an instant sign of poor value. They instinctively see à la carte as an ideal solution, although in an exercise like this, they see that per-channel prices can add up quickly - and severely limit their viewing choices".

Co-author Jon Giegengack says "It's not the price of pay-TV that consumers object to, so much as how much of that price is going to content that they don't use".