About 20% Of U.S. Pay-TV Subs Prone To Canceling: Analysts


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High Cost Of Services Most-Cited Reason for Not Subscribing, Credit Suisse Survey Finds

One in five American pay-TV subscribers may cancel service in the next few years, primarily because they find multichannel video services too expensive, according to a new survey by Credit Suisse.

Overall, 25% of consumers surveyed by the firm currently subscribe to or use an over-the-top service, such as Netflix, Hulu Plus or Amazon Prime Instant Videos. Roughly half of those said they use these services as a substitute for pay TV, with the other half indicating that Internet-delivered video services are complementary to cable, satellite or telco TV, Credit Suisse found.

Among those who don't subscribe to pay-TV, 50% said the reason was the high cost of multichannel video services -- the single biggest factor cited. Other reasons non-pay TV users cited were that they "don't watch a lot of TV" (22%), "just watch broadcast TV over the air" (16%) and "don't find pay TV channels compelling" (14%).

The survey shows the fundamental issue for pay-TV "is the declining value proposition for a portion of the customer base, not OTT services, in and of themselves," Credit Suisse analysts Spencer Wang and Shub Mukherjee wrote in a report issued Thursday.

Roughly 4% of current subscribers say they plan to drop service in the next 12 months, according to the survey...

...Credit Suisse cautioned that its survey population underindexed on pay TV penetration at 68% compared with 87% for the U.S. according to industry estimates. The firm attributed the disparity partially to a relatively large portion of respondents who indicated that they have no TV or watch only broadcast TV.
Read More: About 20% Of U.S. Pay-TV Subs Prone To Canceling: Analysts - 2011-09-16 13:54:10 | Multichannel News

Was the problem that Credit Suisse just happened to find people who were broadcast only, or has the TV industry, including Nielsen Research been padding pay-tv numbers for years?
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