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Cable Technology Feature Article

April 28, 2009

Surveys Produce Conflicting Results on Video Cutbacks

By Gary Kim, Contributing Editor

Two new surveys of consumer attitudes about video subscriptions have produced conflicting results. In a just-completed consumer survey, Pike & Fischer (News - Alert) has found that consumers have no plans to cut back their spending on multichannel video services this year, although many are opting against buying premium packages or VOD movies.
But a recent survey by the Pew (News - Alert) Research Center suggests 24 percent of respondents say they have taken steps to save on their cable or satellite service or have done away with the service altogether.
How do you square the disparate results? Since first-quarter financial reporting so far, though limited, does not show any mass desertion, there is one possible way to harmonize the survey results. The difference is what consumers might be doing (and what historical evidence suggests they will do) other than terminating their subscriptions: cutting back on premium services while maintaining "basic cable" services.
That said, there remains an important possible difference: the Pike & Fischer survey suggests consumers are not scaling back current packages, just eliminating some amount of “on-demand” or discretionary buying, as well as postponing upgrades to premium packages.
The Pew survey suggests a significant number of consumers think they might actually reduce spending on current packages.
So far, there is no evidence that a significant number of consumers actually are terminating multi-channel video subscriptions, though the key cable operator reports are not yet available.
So far, with results from AT&T and Verizon (News - Alert) in, video gains in the first quarter of 2009 are roughly on par with the fourth quarter of 2008, though AT&T added a record number of video subscribers and Verizon increased its video subscriber base 84 percent, year over year.
The Pew Research Center also notes that there has been a decline over the past three years in attitudes toward cable and satellite television service, where less than a quarter (23 percent) of the public say such service is essential, down 10 points from 2006.
So far, at least, financial results at the major telcos have shown a pattern in line with what has been seen in past recessions.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jessica Kostek