The plot continues to thicken for analysts who are beginning to argue if online television is really going to replace traditional cable and satellite television providers in the United States. According to a new study from ABI research nearly 20 percent of online consumers now consider online video as a quick and easy replacement for pay TV.
Streaming TV luring Pay TV customers
That figure amounts to nearly $16.8 billion at risk for satellite and cable providers if more subscribers turn into cord cutters. ABI Research claims that traditional pay TV in the household will decline about half a percent every year through 2017 as online video and affordable (yet premium) subscription based online video streaming services improve and get more advanced.
“While many OTT services focus on movies, the goal of lightweight pay-TV packages should be to introduce customers to the brand and tease customers with premium content offerings,” says Sam Rosen, Director of TV and Video at ABI Research.
ABI argues that traditional pay TV operators, from cable to satellite need to build their businesses utilizing online video and what he calls over-the-top video experiences to draw consumers back into the fold. This could mean providing a mobile or tablet app free of charge for current subscribers–similar to watch HBO is doing with their HBO Go app.
For those who are still clinging to their traditional cable or satellite TV, the companies have a built-in marketing advantage. But for those consumers who have simply moved on from Pay TV and would rather get their television for free via website streams or through drastically more affordable online streaming subscriptions, the traditional Pay TV companies are going to have an uphill battle.
