More than one fifth (21%) of pay-TV subscribers pay for an online video service through their pay-TV provider, a 110% increase from 10% of customers one year ago, recent Parks Associates research found.
The main reason: Operators' growing number of partnerships with over-the-top providers such as Netflix, Hulu and Amazon Fire, the research firm said. Among pay-TV subscribers, 84% buy their service from a traditional cable, satellite or telco provider, Parks Associates reported.
The news is not all good for pay-TV providers. Subscription rates declined 10.1%, dropping to 77% in late 2017 from 86% in 2015, the researcher found.
"The percentage of those open to cancelling pay-TV or minimizing their monthly spend on pay-TV is also up. This ongoing shift is affecting all aspects of service design, promotion, packaging, and pricing," said Brett Sappington, senior director at Parks Associates, in a statement. "As a result, operators are having to reassess their technology and content investments as well as their partnerships and go-to-market strategy."
While North American consumers, in particular, continue snipping away at their TV cords, digital pay-TV subscriptions increased in Asia-Pacific, which represented 83% of net additions in 2017, according to IHS Markit. Simultaneously, however, the same region added twice the number of OTT subscriptions as pay-TV, the research firm said.
In North America, on the other hand, pay-TV subscriptions dropped by 3 million last year while OTT subscriptions grew almost 30 million. Worldwide, there were more than 100 million new OTT subscription video services in 2017, IHS Markit said.
— Alison Diana, Editor, Broadband World News. Follow us on Twitter @BroadbandWN or @alisoncdiana.