ABI Research: Few Consumers Ready to 'Cut the Cord'

  • Online Video
SCOTTSDALE, Ariz. - Although interest in and consumption of online media continues to grow and remain strong, pay-TV operators have not yet seen a significant impact on their subscriber bases. However, early indicators suggest that online media will eventually compete with pay TV.

A recent ABI Research consumer survey of 1,005 consumers revealed that nearly a third of those surveyed are interested in watching Internet video on their TVs – almost double the number who expressed the same interest in a similar 2008 survey.

However, while interest in connected devices is growing and consumers are clearly intrigued by alternative sources for video content, only 13 percent said they would consider canceling their pay-TV services and receiving video content exclusively from the Internet, from over-the-air/terrestrial transmission, or from rentals.

Why do consumers continue to be loyal to pay TV? According to ABI Research practice director Jason Blackwell, it's just easier. He explains, “The alternatives to pay TV - online services from Netflix, Hulu and the like - are decentralized and can be complicated to negotiate.”

Industry analyst Michael Inouye agrees, saying, “Trying to fit all these individual pieces together to replicate what you get from pay TV is often either too much work, or certain content is still missing. It’s partly the multiple content aggregators involved, but there may also be technological issues – insufficient bandwidth in the consumer’s online connection to cope with the demands of HD, for example.”

Analysis of the drivers and inhibitors of online media uptake suggests that consumer education and information will help foster consumer demand, especially among the less technically savvy. User interfaces need to be simplified as far as possible and paired with appropriate controllers or input devices. Finally, Wi-Fi, despite lingering quality-of-service issues, remains the home media networking technology of choice for most consumers. Service providers will have to live with that preference.

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