Are Cord-Cutters Taking OTT’s Low Pricing for Granted?

Price remains a top factor in cutting the cord

The high cost of TV service continues to be the most common reason adults in North America have cut the cord, says TiVo.

According to its Q4 2017 survey on the state of pay TV, TiVo found 86.7% of cord-cutters did so because service had become too expensive.

Concern about pay TV prices is now at the highest level seen since Q3 2016, when TiVo first began tracking cancellation factors.

Meanwhile, TiVo found that fewer people named streaming services like Netflix as the reason for cutting the cord. In the latest survey, 39.7% of respondents cited the use of streaming services, down from 48.3% in Q4 2016.

Netflix’s price has long been a lure to use its streaming service. In both its Q2 and Q3 2017 surveys, TiVo found close to six in 10 Netflix users ranked price as one of its most appealing features.

In general, subscribers may not feel they pay too much for internet streaming services—often using Netflix, Hulu and Amazon Prime Video in tandem—as the cost of subscriptions is less than traditional pay TV.

This sentiment may be changing, though. Per TiVo, Netflix’s appeal due to price declined 4.4 percentage points to 52.0% for Q4 2017, possibly as a result of service’s upped membership fees, which were put into action in early 2018.

eMarketer predicts Netflix will have close to 142 million US viewers by the end of 2021.

"The number of streaming video subscribers has been growing steadily, to the point that many users might take those services for granted and not see them as playing a big role in the larger decision to cancel pay TV," said eMarketer principal analyst Paul Verna. "It’s also possible that as viewers add more and more services—digital and traditional—to their media mix, cost becomes an issue that crowds out others.”