J.D. Power and Associates Reports: Television Service "Cord-Cutting" Has Only a Minor Impact on Residential Television Subscriptions

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June 29th, 2011

via press release:

J.D. Power and Associates Reports:
Television Service “Cord-Cutting” Has Only a Minor Impact on Residential Television Subscriptions

WESTLAKE VILLAGE, Calif.: 29 June 2011 — Amid debates regarding how U.S. consumers will view video content in the near future, just 3 percent of pay-to-view customers report having “cut the cord” and canceling their television service in favor of other viewing options, according to the J.D. Power and Associates 2011 U.S. Residential Pay-to-View StudySM released today.

The inaugural study provides unique insights concerning attitudes, viewing preferences, behavior patterns, awareness and experiences of pay-to-view customers among the major home television and video service providers across the United States.

While a minority of customers overall have canceled their cable television service, rates of cord-cutting vary significantly by generation. Six percent of Generation Y customers (ages 17-34) say they no longer subscribe to a residential television service, compared with only 2 percent of Baby Boomers (ages 47-65). One percent of customers ages 66 to 86 report cancelling cable service, while 4 percent of Generation X customers (ages 35-46) say the same.

“The predictions of the demise of television subscription service as we know it are clearly premature,” said Frank Perazzini, director of telecommunications at J.D. Power and Associates. “The popularity of services such as Netflix and Redbox is a clear indication that consumers are enjoying the availability of alternative viewing options. However, with 52 percent of television customers reporting that they still watch regularly scheduled programming as it is broadcast, the current model will remain viable for the next two to three years, at a minimum.”

The study measures customer satisfaction with the pay-to-view service experience across six factors: variety of videos provided; ease of use; cost of service; customer service experience; billing; and offerings and promotions. Across the industry, overall satisfaction with the pay-to-view video service providers averages 743 on a 1,000-point scale. Netflix and Redbox perform particularly well in satisfying pay-to-view customers.

The study also finds that more than one-fourth (27%) of video service customers indicate that they watch videos on a handheld mobile device, such as a music player, mobile phone or tablet. Mobile phones are still the most commonly utilized handheld mobile device for watching videos (15%), although with the surge in TV applications being developed for tablets, the use of these devices (currently 12%) could increase notably. Music players also currently hold a 12 percent share. Video service satisfaction is above average when customers utilize these mobile devices and music players to access content.

The 2011 U.S. Residential Pay-to-View Study is based on responses from 6,815 U.S. households that evaluated pay-to-view providers, including Amazon, Apple TV, Blockbuster/Blockbuster Express, Google TV, Hulu/Hulu Plus, local video stores, Netflix and Redbox. The study was fielded in April 2011.

About J.D. Power and Associates
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company providing forecasting, performance improvement, social media and customer satisfaction insights and solutions. The company’s quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit JDPower.com. J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

About The McGraw-Hill Companies
Founded in 1888, The McGraw-Hill Companies is a leading global financial information and education company that helps professionals and students succeed in the Knowledge Economy. With leading brands including Standard & Poor’s, McGraw-Hill Education, Platts energy information services and J.D. Power and Associates, the Corporation has approximately 21,000 employees with more than 280 offices in 40 countries. Sales in 2010 were $6.2 billion. Additional information is available at http://www.mcgraw-hill.com.

 
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