Cord cutters in the U.S. are spending an average of $85 per month on online pay-TV or standalone subscription-based services. This is about $30 less than what they were paying for traditional pay-TV services and may involve cord cutters rebundling — subscribing to multiple OTT services, according to Parks Associates.
The firm also found that cord cutters spend almost twice as much as cord-nevers on OTT services. The firm said that there are about 6 million cord nevers, who are broadband households that have never subscribed to traditional pay TV. Perhaps unsurprisingly, cord never homes are less likely to own streaming products such as smart TVs and streaming media players.
Conversely, 58% of cord cutters own a smart TV, which is about on par with the national average. This suggests that cord cutters have “an affinity to video content and services” and therefore is a prudent segment to which to market, Parks says.
“Quantified Consumer: Cutters, Nevers, and the Rebundling of Video” suggests that the fragmentation of services is leading consumers to rebundling in an effort to get the video that they want.
“Cost concerns drove many consumers away from traditional pay TV, and OTT services are delivering on the promise that they can offer desired video content at a considerably lower price point,” Parks Associates President Elizabeth Parks said in a press release about cord cutters rebundling trend. “But we find 47% of cord-cutters subscribe to four or more OTT services, so in order to have an optimal video portfolio, they are creating their own video bundles by stacking OTT services.”
The quick evolution of video technology and the disruptions in normal routines and stressed finances caused by the COVID-19 pandemic are among the reasons that non-traditional video distribution is growing.
In January, The Trade Desk’s Future of TV survey found that 27% of U.S. cable subscribers planned to cut their subscriptions by the end of this year. That compares with a still significant but far lower portion – 15% — that the company estimated did so last year.