New Cord-Cutting Data Finds Cable Companies Under Threat of Disruption from Streaming Services
December 11 2014 - 8:00AM
Business Wire
The way Americans pay for TV programs is undergoing a massive
shift. Independent data released today from Marchex, a mobile
advertising technology company, finds that Americans are looking to
“shave” or “cut the cord” with cable providers in order to stream
their favorite shows over the Internet.
To understand at scale what kinds of TV services Americans are
willing to pay for, Marchex used its Call Analytics platform, which
has processed anonymous data from 1.1 million consumer phone calls
placed to leading cable providers in 2014 across the U.S. Marchex’s
technology further analyzed a subset of 500 randomly selected phone
calls and found:
- Nearly 26% of new customers asked for
Internet service only, as opposed to 22% who asked for only cable.
This suggests that more consumers are interested in an a la carte
pay TV model, in which the Internet provides the gateway to content
and channels without costly bundling.
- Nearly 40% of consumers asked providers
about paying for specific channels, which strongly suggests that
consumers want more freedom and flexibility to cherry pick
content.
- Of those consumers, nearly half, 47%,
wanted premium programming, such as Showtime, Starz or HBO. The top
premium channel requested was HBO.
- When it comes to sports networks, five
times as many consumers in the study asked for ESPN compared to
those asking for Fox Sports – 20% vs. 4%.
- The category of sports is critical, and
ESPN leads the way. Sports matches remain a huge ratings draw,
leaving fans largely unable to cut the cord.
“Cable companies are coming face-to-face with the threat of
disruption. Our data shows that providers need to start addressing
pressing consumer demands; otherwise, they risk losing real market
share when people decide to cut the cord for good,” said Chen Zhao,
Director of Analytics for the Marchex Institute, the data and
insights team at Marchex.
The findings appear in a white paper released today entitled
“Cutting the Cord: How Cable Companies Can Turn an Impending Threat
into a Market Opportunity,” and is the latest in the Institute’s
Industry Trend Series, which spotlights data in a particular
business vertical.
In the paper, Marchex data analysts note that consumers are
incentivized to sign up for cable when a provider offers discounts
or tacks on additional features. On the flip side, consumers
failed to sign up when providers insisted on locking down
three-year contracts.
The paper outlines various ways in which cable providers should
respond to this shifting consumer landscape. It also noted that the
balance of power that providers have enjoyed for decades is coming
to an end.
“While the vast majority of consumers today remain traditional
cable subscribers, industry data and Marchex’s findings confirm
that the cable industry is a legacy model under threat of new and
disruptive services,” the paper states. “Change is crucial to its
future success.”
To download the white paper, please
visit http://www.marchex.com/institute/cable_cord_cutting.
About Marchex
Marchex is a mobile advertising technology company. The company
provides a suite of products and services for businesses that
depend on consumer phone calls to drive sales. Marchex’s mobile
advertising platform delivers new customer phone calls to
businesses, while its technology analyzes the data in these calls
to help maximize ad campaign results. Marchex disrupts traditional
advertising models by giving businesses full transparency into
their ad campaign performance and charging them based on new
customer acquisition.
Please visit www.marchex.com or @marchex on Twitter to learn
more.
Marchex Corporate CommunicationsSonia Krishnan,
206-331-3434Email: skrishnan(at)marchex.com
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