Offering a deeper look into the increasingly volatile world of pay TV, a new survey from Digitalsmiths found that 46.6% of respondents are at risk of cutting the cord or leaving their current pay TV provider for another. 

Digitalsmiths, the video search and discovery firm acquired last year by TiVo, revealed those findings in its Q2 2015 Video Trends Report, based on a survey of 3,210 adults in the U.S. and Canada.

The survey found that 7.7% of respondents switched pay TV providers in the last three months, a 1.7% year-over-year increase. Over the next six months, 14.9% are at risk to cut service (4.5%), change providers (8.1%), or switch to an online app or rental service (2.3%).

While the cost of service factors into this trend (61.6% said they pay more than $100 month to their provider), the group that is “unsatisfied” with their service rose to 6.1% in the Q2 survey, while 76.6% claimed to be “very satisfied” or “satisfied.”  Those in the unsatisfied camp cited reasons such as increased fees and poor customer service.

A La Carte and OTT

Digitalsmiths also shed some light on the demand for a la carte, skinny bundles and the rising popularity of OTT services.

On the OTT front, the surveyed group was most familiar with Hulu (44.7%), compared to HBO Now (31.2%); Showtime’s new standalone OTT offering (17.1%); CBS All Access (10.8%); Sling TV (9.7%); and PlayStation Vue  (9%). Consumer awareness for that full group rose 1.8% in Q2 versus Q1 2015. About 42.5% were not familiar with those offerings.

Digitalsmiths also found that 79.2% said they would like to pick only the channels they watch (down 2.2% in Q2 versus Q1 2015), and see a selection of 17 to 18 channels as the ideal lineup.

The average price they’d pay for that channel mix was $39.50 per month. Almost 20% said they’d be willing to pay $10 to $20 per month, 17.3% said they’d pay $21 to $30 per  month, and only 3.1% said they’d pay $81 or more per month.

“These numbers illustrate clear demand by respondents for the à la carte Pay-TV model,” Digitalsmiths noted in the study, which also found that 35.1% were overwhelmed by the number of channels available to them. “While the cost of programming continues to increase, consumers could become less tolerant of paying for unvalued programming.”

For those who want a la carte, ABC was the top channel selected, followed by Discovery Channel, NBC, History, CBS, A&E, Nat Geo Channel, Fox, HBO, PBS, Comedy Central, The Weather Channel, AMC, Food Network, Animal Planet, TLC, TBS, TNT, CNN and HGTV. The bottom five of the group were Velocity, Telemundo, Univision, Fusion and Ovation TV.

‘Cord-Cheating’ and OTA

The study took a fresh look at “cord-cheating,” where subs seek VOD fare and linear TV from parties other than their pay TV provider. In Q2, 57.7% subscribed to a service such as Netflix,Hulu, Amazon, Sling TV, and HBO Now, a figure that grew 7% year-over-year, and 22.8% over a two-year span.

Of the 15.7% surveyed who do not take a traditional pay TV service, 33.3% use an antenna to get basic TV channels.

TV Everywhere

A positive trend for pay TV is increased awareness of authenticated TV Everywhere services. In the Q2 survey, 43.3% said they were aware that their pay TV provider offered TVE, up 4.8% year-on-year, and up 11.2% over two years.

Almost one-fourth of respondents said they have their provider’s TVE app, up 2.3% year-on-year.

Of those who do tap into TVE, 45.4% use it on a weekly basis, up 3% year over year. However, 54.6% said they access those TVE offerings “rarely” or “never.”

The study also highlighted the popularity of apps from programmers and broadcasters. In Q2, 27.8% said they have installed one on their tablet and/or smartphone.

In terms of installations, the top apps in this category were: HBO Go (5.9%), Hulu (5.7%); ABC  (5.2%); WatchESPN (4.9%); A&E (4.5%); CBS (4.4%); and NBC (3.2%).

Digitalsmiths’ study also centered some results on the vendor’s bread and butter – search and discovery. About 22.2% said that their provider makes TV and movie recommendations to them, up 6% over two years, and 92.5% felt that the recommendations made were “always” or “sometimes” accurate, up 2.4% versus Q1 2015.

Digitalsmiths clients include AT&T/DirecTV, Bright House Networks, Charter Communications, Dish Network, Foxtel, FOX Sports, Sharp Electronics, Time Warner Cable and Verizon, among others. 

In a trend evidently led by Sling TV users, more than 20% of adult broadband customers who stream from an OTT subscription service are “cord cheaters,” in that they use the credentials of someone else living outside their respective households, The Diffusion Group found in a new study.

As you can see from the chart, TDG’s research found that 25.5% of Sling TV users cheat in that way, followed by Hulu Plus, Netflix, HBO Go (the programmer’s TV Everywhere service; it’s stand-alone OTT service, HBO Now, launches next month), and  Amazon Prime.

It’s interesting data that sheds some light on the practice of password sharing, something that HBO CEO Richard Plepler has called a “terrific marketing vehicle” for the next generation of viewers, and not something that’s had a material impact on HBO's business. TDG, meanwhile, said the study shows that there’s an “unfortunate mindset” that sharing passwords among friends and family has become perfectly acceptable.

“While it is widely acknowledged that ‘cord cheating’ is occurring, few comprehend how widespread the behavior has become,” Michael Greeson, TDG founder and director of research, said in a statement.

Despite the dubious honor of being on top of TDG’s cord-cheating table, the recently-launched Sling TV service is somewhat protected in that it’s starting off as a single-stream service. It does have programming rights with many programmers that allow for multiple streams, but it has yet to launch a tier that takes advantage of those rights. Netflix, meanwhile, makes subs pay more for multiple streams -- $8.99 per month for two streams (including HD), and a premium, four-stream tier that runs $11.99 per month (and includes access to 4K titles). Netflix’s basic $7.99 per month tier is single-stream and only supports standard-def resolutions.

But I was also curious as to how TDG arrived to these cord-cheating numbers. Greeson said the research was based on a February 2015 online survey of more than 3,500 adult broadband users selects randomly from a panel of more than 3 million “double-opt-in participants. Of that group, OTT SVOD users were asked to answer statements that best describe how they access a variety of subscription based services, a group that also included CBS All Access. Those respondents then noted if they or someone in the their household subscribes to one of them, or if they use a friend’s or family member’s login and password.

And the cord-cheating label might sound familiar to you. FreeWheel, the online ad tech firm now owned by Comcast (not Cablevision Systems' new WiFi only phone service), uses that term in its quarterly video trends reports. But instead of using it to describe password sharing as TDG does, FreeWheel’s use of the term to describe a trend in which consumers use third-party, over-the-top VOD services as an alternative to a pay-TV operator’s VOD offerings, including authenticated TV Everywhere apps.