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Pay TV - US - November 2018

"Television is an essential element of nearly all US homes. The pay TV industry is going through a period of rapid change, with traditional cable and satellite companies now competing for market share against a host of new streaming contenders. During this transformation, corporations and consumers alike have been struggling to choose amongst different market models for pay TV service. While consumers may not ultimately find savings through cord cutting, they are also not willing to pay much more either – creating a tough competitive environment for industry players."

- John Poelking, Leisure & Media Analyst

This report will look at the following areas:

  • Overall revenue stability belies a significant industry shift
  • Streaming content players are now mainstream
  • vMVPDs in early stage of adoption, but poised to steal share from traditional providers

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • Overview
          • The issues
            • Overall revenue stability belies a significant industry shift
              • Figure 1: Pay TV revenues, by segment, at current prices, 2014-18 (est)
            • Streaming content players are now mainstream
              • Figure 2: Streaming video services subscribed to – Select services, July 2018
            • vMVPDs in early stage of adoption, but poised to steal share from traditional providers
              • Figure 3: vMVPD subscriptions, by generation and household income, July 2018
            • The opportunities
              • One third of non-subscribers open to adding service
                • Figure 4: Pay TV usage and interest by non-subscribers, July 2018
              • Young people key targets for streaming-only services
                • Figure 5: Select attitudes on pay TV, by 18-24s vs all, July 2018
              • Parents another opportunity to win market share
                • Figure 6: Pay TV – changing service and factors influencing choice, by parent status, July 2018
              • What it means
              • The Market – What You Need to Know

                • Flat overall growth in a bifurcated market
                  • Encouraging outlook for OTT
                    • New competitors on the horizon
                    • Market Size

                      • Turbulence hidden within a stagnant market
                        • Figure 7: Pay TV (including both MVPD and OTT) revenues, at current prices, 2014-18
                        • Figure 8: MVPD and OTT revenues, at current prices, 2014-18
                      • Will consumers continue to pay for content?
                        • Figure 9: Households subscribing to pay TV*, 2014-18
                    • Market Perspective

                      • The rebirth of the bundle
                      • Market Factors

                        • Everything but the kitchen sink – and local news
                          • 5G: Speeding up cord cutting?
                          • Key Players – What You Need to Know

                            • Consolidation key to achieving scale
                              • Content is power
                                • Concerns about service
                                  • Is the future virtual?
                                  • What’s Working?

                                    • The bigger the better
                                      • Figure 10: Cable TV Subscriptions by brand, April 2017-July 2018
                                      • Figure 11: Satellite TV Subscriptions by brand, April 2017-June 2018
                                    • Content is king
                                    • What’s Struggling?

                                      • Service without a smile
                                        • Is TVE going anywhere?
                                            • Figure 12: Use of TV Everywhere functions, May 2018
                                        • What’s Next?

                                          • Is the future virtual?
                                          • The Consumer – What You Need to Know

                                            • Traditional services still dominate market
                                              • Service bundles drive choice
                                                • Younger people love streaming, TVE
                                                  • Netflix a serious contender
                                                  • Pay TV Services Used

                                                    • vMVPD services still in early stages
                                                      • Figure 13: Pay TV services subscribed to, July 2018
                                                      • Figure 14: vMVPD services subscribed to (among streaming pay TV service subscribers), July 2018
                                                    • Age is a significant driver of vMVPD service adoption
                                                      • Figure 15: Pay TV services subscribed to, by age, July 2018
                                                    • Region, area of residence significant drivers
                                                      • Figure 16: Pay TV services subscribed to, by area, July 2018
                                                  • Drivers of Subscription Interest

                                                    • Service bundles drive purchase
                                                      • Figure 17: Factors in choice of pay TV service selection, July 2018
                                                    • Content choices less relevant for older users
                                                      • Figure 18: Factors in choice of pay TV service selection, by age, July 2018
                                                    • Significant price sensitivity amongst Hispanics
                                                      • Figure 19: Factors in choice of pay TV service selection, by race/Hispanic origin, July 2018
                                                    • Price might tempt non-subscribers
                                                      • Figure 20: Pay TV usage and interest by non-subscribers, July 2018
                                                      • Figure 21: Factors driving interest in pay TV for non-subscribers, July 2018
                                                  • Pay TV Behavior

                                                    • Few consumers plan to switch
                                                      • Figure 22: Behavior and intent to change pay TV service, by age, July 2018
                                                    • Parents more likely to change
                                                      • Figure 23: Behavior and intent to change pay TV service, by parental status, July 2018
                                                    • Young people embrace app and streaming usage
                                                      • Figure 24: Advanced pay TV feature usage, by age, July 2018
                                                    • Upper-income consumers more loyal to pay TV
                                                      • Figure 25: Advanced pay TV feature usage, by household income, July 2018
                                                  • Attitudes toward Pay TV

                                                    • Consumers love Netflix – but are they loyal?
                                                      • Figure 26: Attitudes toward pay TV, by age, July 2018
                                                    • Parents at greater risk of switching
                                                      • Figure 27: Attitudes toward pay TV, by parental status, July 2018
                                                    • Hispanics love Netflix; Black consumers less sure
                                                      • Figure 28: Attitudes toward pay TV, by race and Hispanic origin, July 2018
                                                    • Pros and cons of pay TV points to opportunities for hybrid services
                                                    • OTT Content Service Behavior and Attitudes

                                                      • Netflix leading streaming content service
                                                        • Figure 29: Streaming content services subscribed to, July 2018
                                                        • Figure 30: Streaming content services subscribed to, by age and household income, July 2018
                                                      • Cord cutters motivated by ease of use
                                                        • Figure 31: Attitudes toward streaming video services, July 2018
                                                    • CHAID Analysis

                                                      • Methodology
                                                        • Affluent households without children most loyal to their pay TV service
                                                          • Figure 32: Attitudes towards pay TV subscriptions – CHAID – Tree output, July 2018
                                                          • Figure 33: Attitudes towards pay tv subscriptions – CHAID – Table output, July 2018
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Sales data
                                                            • Consumer survey data
                                                              • Consumer qualitative research
                                                                • Abbreviations and terms
                                                                  • Abbreviations

                                                                  Pay TV - US - November 2018

                                                                  £3,435.47 (Excl.Tax)