July 30, 2015 | Authored by: Vindicia Team
7 percent of American households have OTT, but not pay TV
Americans enjoy the freedom of choosing the programming they want to watch, so a growing number are strictly subscribing to OTT services. In fact, according to recent research from Park Associates, 7 percent of American households subscribe to broadband and OTT programming, but don't buy traditional pay TV services.
Brett Sappington, director of research of Parks Associates, said the OTT services marketplace keeps changing at a fast pace.
"A variety of new players are entering the market, and operators including DISH Networks, Rogers Communication, Bell Canada, and Sky are responding with OTT video services of their own. How the industry responds to this change will ultimately affect the fundamental structure of the video industry for years to come," Sappington explained.
The research firm predicts subscriptions to OTT services will increase to more than $19 billion in 2019.
"OTT services will increase to more than $19 billion in 2019."
Sappington added that dedicated video customers are still subscribing to pay TV services if their budgets allow it. Companies involved in the video ecosystem, however, are enthusiastic about reaching customers who no longer think pay TV is worth the money.
The report also pointed out that the cable industry's TV Everywhere approach isn't doing that well . Although the initiative allows subscribers to view programming on computers and tablets, 82 percent of Americans still aren't aware of what TV Everywhere is.
Is pay TV on its way out?
With so many people watching their favorite programming through the Internet, it can make you wonder if pay TV providers are in danger of becoming extinct. According to a 2014 GfK research report, 19 percent of American TV viewers have at least one streaming device in their home. More than one-third of these people admitted they use the devices to stream content instead of watching their favorite programming on traditional TV.
"Digital media players take a primary role in users' viewing behavior, ranking as the first or second destination – ahead of live TV or DVRs – when deciding what to watch in primetime," David Tice, senior vie president at GfK said. "However, a positive note for linear networks is that digital media player users don't perceive their use as cannibalizing their regular TV viewing."
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