Pay TV service providers are doing a better job of keeping customers satisfied, but that isn’t doing much to quench their subscribers’ desire to cut the cord, a new Morgan Stanley survey has found.

In its sixth annual Streaming Media Survey of 2,500 adults 18-34 conducted in March, Morgan Stanley media analyst Ben Swinburne and Internet analyst Brian Nowak found that nearly 90% of respondents who have a pay TV subscription were satisfied with their service, an increase of 400 basis points over the prior year.

At the same time, the share of respondents who said they plan to cut the pay TV cord increased 550 basis points, to 26%.

Swinburne said that while “it’s a little hard to circle that square,” the paradox seems to highlight what other analysts and operators have been saying for months — broadband service is becoming the most important part of the pay TV bundle.

A deeper look at the survey seems to bear that out. Telco service providers, which generally have higher data speeds than cable companies, had the highest satisfaction rates at 55%, but also had the highest intent to cut the cord at 22%.

Cable service providers had their best performance in the six years the study has been conducted, with just 5% of respondents saying they intend to cut the cord in the next 12 months.

Younger respondents showed the greatest desire to cut the cord — 33% of those aged 18-29 and 37% aged 30-44. But Swinburne said recent carriage disputes may have played their part. AT&T and DirecTV customers showed the greatest desire to cancel service during the survey period — 43% and 29%, respectively — while the Spanish-language broadcaster Univision has been in a carriage spat with U-verse TV. (AT&T owns both U-verse and DirecTV.)

Consumers also seem to be more willing to pay for streaming services: Those who said they would shell out for online subscriptions nearly doubled to 39% in 2016 from 19% in 2011.

More than half of total respondents cited price as the largest concern against buying TV and movies online a la carte, with more respondents willing to purchase at lower prices.

Netflix once again was first choice among services consumers would replace their pay TV subscriptions with — 35% — followed by You Tube (29%). Amazon Prime Video and Hulu Plus tied for third at 27%.

Original programming continued to drive Netflix use, with 45% of respondents saying that was a primary reason for subscribing (up from 43% last year).

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said the survey results point to a common problem when people are asked about switching pay TV service.

“When push comes to shove, people may say they want to cut the cord but, for most, that is incredibly difficult,” Wlodarczak said. Last year’s survey seems to back that up: 20% of respondents said they intended to cut the cord, but pay TV penetration only dropped 1 percentage point, to 77.5% from 78.5% in 2014. Wlodarczak also pointed out that telco TV providers don’t have an obligation to offer service to everyone, adding, “So a survey  of telco TV is effectively a survey of higher per-capita-income households that are better able to afford price increases, while cable offers service to many lower income households that feel the pinch from continued video price increases.”

CHART: Satisfaction Guaranteed

Customer satisfaction in the pay TV universe is on the rise from last year, according to Morgan Stanley research.

                                                             2016          2015

Very/Somewhat Satisfied . . . . . . . . 88% . . . . . 85%

Very/Somewhat Dissatisfied . . . . . .12% . . . . .16%

SOURCE : Alpha Wise and Morgan Stanley research

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.

Looking to amp up its own user base while doing the same for one of its OTT partners, Roku has launched a promotion that offers two free months of Hulu Plus to customers who buy any new Roku player by September 30.  

According to the fine print of the just-launched promo – available, of course, only to new Hulu Plus subs -- consumers can partake by activating a new Roku player (from the new $49.99 Roku Streaming Stick on up to the $99.99 top-of-the-line Roku 3 model) through September 30. Once the device is activated, Roku will send the user an email with details on how to redeem the free Hulu Plus offer.

Luring users to streaming players using free OTT video offers is now part and parcel to the game as the market continues to heat up. Google offered three months of Netflix with the purchase of the Chromecast when it launched the streaming adapter last summer, then had to quickly nix the promotion due to overwhelming demand. Amazon, meanwhile, meanwhile, is trying to prime the pump for its new Fire TV by pairing sales with free 30-day subscription to its Prime service, which includes access to a vast streaming video library. 

But expect more offers such as this one from Roku as makers of OTT video players, including Amazon and the expected influx of devices that will be powered by the new Android TV platform – continue to jockey for position.

For its part, Roku has shipped about 8 million device sin the U.S., but hasn’t released any international shipment figures. Last week, Parks Associates said that Roku was the best-selling streaming media device in the U.S. last year,  outpacing domestic sales of the Apple TV.

If the Roku promo is successful, it could provide a bit of a bump to Hulu Plus, which recently surpassed the 6 million subscriber mark and just announced that it would become the exclusive streaming VOD home for the irreverent South Park.

Amazon is starting to address one of the early limitations of its new Fire TV box – the device’s integrated voice search capabilities are limited to Amazon’s own video library and Vevo. 

That will start to change this summer, when Amazon extends voice search support to Hulu Plus, Crackle and Showtime Anytime.

“We’re excited and energized by the momentum we’re seeing with Fire TV,” said Dave Limp, vice president, Amazon Devices. “Customers are telling us they love it, developers are building for it, and we’re working hard to expand existing features and build new ones. We’re thrilled to have Hulu Plus, Crackle, and SHOWTIME integrating their full selection of movies and TV shows into Fire TV’s unified voice search.”

Amazon also identified several partners that are working on app for the platform, including Telltale Games, Disney Interactive, Minority Media, Gaiam, and Twitch, a popular service that allows gamers to live stream their play via the Web.

Amazon said it’s also working on a new browsing feature for Prime Instant Video, and the integration of Amazon FreeTime (parental control software currently used in Kindle tablets) and Amazon MP3, which will be part of a “free, over-the-air software update.”