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Pay TV and Bundled Communication Services - US - September 2019

Covered in this report

For the purposes of this report, Mintel includes the following in its definition of pay TV:

  • MVPD (multichannel video programming distributor), including cable television subscription services, direct broadcast satellite television subscription services and telephone company fiber/IP (internet protocol) multichannel video programming
  • OTT (over-the-top) or streaming subscription services delivering TV network service via the internet (such as Sling TV and DIRECTV NOW) and those delivering on-demand content (such as Netflix and Hulu)

Services that combine video content with other types of services (such as Amazon Prime) are not included in market size estimates, although they are discussed in this report where relevant.

Bundled communication services refers to home internet and landline telephone connections, often bundled together with pay TV; home security and mobile phone plans are also offered as a bundle by some service providers.


"The pay TV and bundled communications industry in the US is in the midst of dynamic changes due to fundamental shifts in consumer entertainment behaviors. In addition to pay TV, household entertainment can include gaming, internet browsing and video streaming services. As such, consumer priorities have shifted toward high-quality internet as opposed to attractive TV channel packages."
- Buddy Lo, Senior Technology Analyst

This Report will cover the following areas:

  • The US Pay TV and bundled communications landscape
  • Bundled services
  • Pay TV behaviors
  • Home internet behaviors
  • Home internet and pay TV satisfaction

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Market overview
          • Top takeaways
            • The issues
              • Pay TV cable and satellite subscriptions tumbling
                • Figure 1: Cable and satellite TV subscription, 2010-18
              • The value of TV bundles are questioned by subscribers
                • Figure 2: Pay TV behaviors, July 2019
              • Pricing and customer service are pain points for consumers
                • Figure 3: Home internet behaviors, by satisfaction with internet and TV bundles – Price and customer service, July 2019
              • The opportunities
                • Bundling additional services could expand reach and increase revenue
                  • Figure 4: Home internet and pay TV satisfaction – Price, by bundled services, July 2019
                • Parents, especially fathers likely to return to paid TV
                  • Figure 5: Pay TV behaviors, by gender and parental status, July 2019
                • Younger higher earning households look for a change
                  • Figure 6: Home internet behaviors – Would switch ISPs, by age and household income, July 2019
                • What it means
                • The Market – What You Need to Know

                  • Market places priority on internet connection over pay TV content
                    • Cable providers provide the most home internet connections
                      • 5G could draw early adopters to wireless ISP providers
                      • Market Size

                        • Decline in Pay TV spend point to shifting consumer priorities
                          • Figure 7: Revenues from pay TV and home communication services, at current prices, 2014-19
                          • Figure 8: Revenues from pay TV and home communication services, by segments, at current prices, 2014-19
                          • Figure 9: Revenues from pay TV and home communication services, by segments, at current prices, 2014-19
                      • Market Breakdown

                        • Cable providers are the top ISPs in the US
                          • Figure 10: Home internet service provider, November 2017-October 2018
                          • Figure 11: Home internet service provider, November 2012-October 2018
                      • Market Perspective

                        • Comprehensive 5G coverage could get consumers to drop cable
                          • Figure 12: 5G awareness and knowledge, January 2019
                          • Figure 13: Attitudes toward mobile networks – 5G, by 5G awareness, January 2019
                      • Market Factors

                        • Digital video streaming services chip away at TV bundles
                          • Figure 14: Number of US OTT services, 2013-March 2019 YTD
                        • Live internet TV streaming platforms threaten bundles
                        • Key Players – What You Need to Know

                          • Verizon Fios a big factor behind fiber adoption in Northeast
                            • Pay TV packages a casualty in today’s entertainment landscape
                              • Telecom services expanding operations to both home and wireless
                                • vMVPDs impact on the bundled TV industry
                                • What’s Working

                                  • Verizon’s fiber internet prevalent in Northeast states
                                    • Figure 15: Verizon “Fios" product direct mail volume and spend, by region, January 2018-July 2019
                                    • Figure 16: Verizon Fios direct mail promotion, October 2018
                                  • AT&T brings fiber connections to the South
                                    • Figure 17: AT&T fiber direct mail, March 2019
                                    • Figure 18: AT&T US fiber coverage map screenshot, August 2019
                                • What’s Struggling

                                  • Pay TV subscriptions continue to get cut
                                      • Figure 19: Cable and satellite TV subscriptions, 2010-18
                                  • What to Watch

                                    • Telecoms expand offerings across pay TV, home internet and mobile
                                      • Figure 20: Xfinity Mobile ad campaigns and ad pieces, April 2017-July 2019
                                      • Figure 21: Xfinity mobile direct mail, October 2018
                                      • Figure 22: T-Mobile TVision direct mail, May 2019
                                      • Figure 23: T-Mobile home internet direct mail, July 2019
                                  • The Consumer – What You Need to Know

                                    • Cable remains the top home internet provider
                                      • Bundlers a sizeable segment of the market
                                        • Nearly four in 10 consumers would switch ISPs for a better price
                                          • Pay TV services need to offer additional customization
                                            • Customer service remains critical to retention
                                            • Home Internet Source

                                              • Majority of the market has cable based internet
                                                • Figure 24: Home internet source, July 2019
                                              • Higher earners upgrade to fiber connections, while lower earners use mobile hotspots
                                                • Figure 25: Home internet source, by household income, July 2019
                                              • Fiber optic connections most prevalent in Northeast and South
                                                • Figure 26: Home internet source, by geographic area, July 2019
                                                • Figure 27: AT&T US fiber coverage map screenshot, August 2019
                                              • Younger consumers use less conventional ISPs
                                                • Figure 28: Home internet source, by age, July 2019
                                              • DSL still plays a prominent role for rural consumers
                                                • Figure 29: Home internet source, by area, July 2019
                                            • Bundled Services

                                              • More than half bundle pay TV with home internet
                                                  • Figure 30: Services bundled with home internet and paid separately, July 2019
                                                • Older consumers bundle landlines, younger consumers bundle mobile plans
                                                  • Figure 31: Phone services bundled with home internet provider, by age, July 2019
                                                • Younger, wealthier consumers more likely to bundle home security
                                                  • Figure 32: Home security system bundled with home internet provider, by age and household income, July 2019
                                                • Black men look to protect their home and property
                                                  • Figure 33: Home security system bundled with home internet provider, by gender and race/Hispanic origin, July 2019
                                                • Bundling mobile services could be an opportunity for growth
                                                  • Figure 34: Mobile phone service and data bundled with home internet provider, by home internet source, July 2019
                                              • Home Internet Behaviors

                                                • Nearly four in 10 would switch ISPs for a better price
                                                  • Figure 35: Home internet behaviors – Switching consideration, July 2019
                                                • Consideration for switching jumps among 25-34 year olds
                                                  • Figure 36: Home internet behaviors – Switching consideration, by age, July 2019
                                                • Consumers 25-34 earning $50K+ most likely to consider switching ISPs
                                                  • Figure 37: Home internet satisfaction switching consideration – CHAID – Tree output, July 2019
                                                • CHAID methodology
                                                  • Asian consumers more aware of performance from their ISP
                                                    • Figure 38: Home internet behaviors – Awareness, by race and Hispanic origin, July 2019
                                                  • Black consumers more willing to upgrade with their current ISP
                                                    • Figure 39: Home internet behaviors – Switching considerations, by race and Hispanic origin, July 2019
                                                  • Satellite subscribers less likely to switch ISPs
                                                    • Figure 40: Home internet behaviors – Switching considerations, by home internet source, July 2019
                                                • Pay TV Behaviors

                                                  • TV subscribers may feel their money is wasted on unwatched channels
                                                      • Figure 41: Pay TV behaviors, July 2019
                                                    • Live sports a primary driver for men
                                                        • Figure 42: Pay TV behaviors – Live sports, by gender and age, July 2019
                                                        • Figure 43: Hulu Live TV informational email, April 2019
                                                      • Fathers more likely to bring the household back to TV
                                                        • Figure 44: Pay TV behaviors – Reconnecting TV, by gender and parental status, July 2019
                                                      • Younger women most likely to use other devices while watching TV
                                                        • Figure 45: Pay TV behaviors – Other devices, by gender and age, July 2019
                                                      • Younger consumers utilizing pay TV innovations
                                                        • Figure 46: Pay TV behaviors – Innovations, by age, July 2019
                                                        • Figure 47: Xfinity services informational direct mail, June 2019
                                                    • Home Internet and Pay TV Satisfaction

                                                      • Pricing remains the critical pain point for consumers
                                                        • Figure 48: Home internet and pay TV satisfaction – Bundled internet and TV services, July 2019
                                                      • Bundled services must prioritize price and billing
                                                        • Figure 49: Key drivers of pay TV/internet bundle satisfaction, July 2019
                                                      • Men more likely to be satisfied with pricing and billing contracts
                                                        • Figure 50: Home internet and pay TV satisfaction – Bundled internet and TV services, by gender, July 2019
                                                      • Internet TV picture quality comparable to bundled TV services
                                                          • Figure 51: Internet TV satisfaction, July 2019
                                                        • Nonbundlers less satisfied with various features of home internet
                                                          • Figure 52: Home internet satisfaction, July 2019
                                                          • Figure 53: Key drivers of home internet provider satisfaction, July 2019
                                                          • Figure 54: Overall home internet and pay TV satisfaction, by home setup, July 2019
                                                        • Customer service experience a driver for customer retention
                                                          • Figure 55: Home internet behaviors, by satisfaction with internet and TV bundles – Price and customer service, July 2019
                                                        • Bundling on-demand streaming services improves pricing perceptions
                                                          • Figure 56: Home internet and pay TV satisfaction – Pricing, by on-demand streaming service bundlers, July 2019
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Sales data
                                                            • Consumer survey data
                                                              • Consumer qualitative research
                                                                • Marketing creative
                                                                  • Abbreviations and terms
                                                                    • Abbreviations
                                                                      • Terms
                                                                      • Appendix – The Consumer

                                                                        • CHAID methodology

                                                                        Pay TV and Bundled Communication Services - US - September 2019

                                                                        £3,435.47 (Excl.Tax)