Pay TV has been a staple of UK home entertainment for decades. To this day, many households choose a pay TV service to gain access to a vast array of programs and films, surpassing what is available through national broadcast networks – the most common reason for investing, according to TiVo’s latest UK Video Trends Report (VTR).
Of those that choose pay TV, the average monthly spend is £55.59, including internet services. And some things don’t change: Sky still dominates the UK landscape, holding over half of UK pay TV market share.
But despite pay TV businesses spending years building strongholds in the UK, it’s no secret that many consumers have jumped ship in favour of more ‘modern’ offerings, such as simply streaming on a smart TV. According to the data, more than a fifth of UK pay TV households plan to ditch their subscription in the next six months.
Which raises the questions: are pay TV providers ready to tackle churn? And why are people cancelling these services?
Cord-cutting: the truth
The concept of cord-cutting— cancelling traditional pay TV subscriptions in favour of video content over the internet alternatives— is nothing new. Since the mid noughties, the streaming revolution has offered up an array of attractive options to lure UK households away from pay TV.
And cord-cutting is still just as relevant today. In the last six months, one in ten (10%) UK respondents admitted to cancelling their pay TV service, a slight increase from last year’s 9%. While a further 22% of current pay TV subscribers say they’ll cancel their service within the next six months.
Naturally, this is concerning for pay TV businesses, so it’s key to understand what these cord-cutters are planning instead. Nearly half (45%) intend to replace their subscription with a paid streaming service that offers live TV channels over the internet— Now TV, for example. Others plan to rely on broadcast TV through an aerial, dish, or app (26%), while a smaller portion (18%) is turning to free, ad-supported streaming platforms like Tubi.
The opportunity for pay TV businesses
However, don’t be too alarmed. In reality, pay TV churn is actually slowing— down 3% YoY. In fact, some consumers have even ‘boomeranged’. More than a quarter (28%) of current pay TV subscribers are individuals who previously cut the cord, but later chose to return.
With that in mind, pay TV businesses can find solace in that alternative services alone don’t fully meet everyone’s needs. And there’s a clear opportunity to focus on the user experience to retain, win-back and attain new UK customers.
To remain competitive, pay TV providers can prioritise building an offering which encourages high engagement and high viewership— two factors that work together to generate lower rates of churn. A huge part of this is content aggregation and personalisation. No customer is the same, so their experience shouldn’t be either. By centralising all of today’s amazing TV shows, movies, sports and more across live, recorded, on-demand and streaming TV, pay TV providers can ensure there’s less scrolling and more watching.
Plus, a personalised interface which leverages AI-powered search and recommendation capabilities, while offering innovative voice search capabilities to further speed up time-to-content, is an attractive prospect for past, present and future customers alike.
So, it’s not doom and gloom for pay TV businesses. With the right technology partner, they can create an experience which resonates with changing consumer expectations. It’s not only an opportunity to reduce churn, but also rekindle the loyalty of former subscribers— and attract new ones.
Comments are closed.