There has been a lot of talk recently about the cable cutting crisis: more and more cable subscribers are opting to eliminate service in favor of over-the-top (OTT) streaming options such as Netflix and Amazon Video. But according to new data, rural communications service providers (CSPs) are actually maintaining their cable subscribers. Why are these communities immune to the OTT trend? Let’s take a look.
Live TV is still king. In January, Nielsen released data indicating that 24 out of 25 designated market areas still prefer live TV to streaming. Furthermore, survey participants reported watching between 3-5 hours of live TV daily. While OTT viewing options are expanding as mobile devices, tablets and smart TVs enter the home, these numbers indicate that live TV isn’t going anywhere.
Rural communities are diverse. One of the factors insulating rural areas from the cable cutting crisis is diversity. There are particular demographics that have little interest in streaming, such as the elderly. With no young children in the home and a preference for simple technology, older people settling in rural areas stick with paid TV subscriptions. Unlike larger cities with homogenous populations, rural communities are comprised of members from a variety of ethnic, social and financial backgrounds. This diversity protects rural CSPs from sweeping changes in customer demand.
Cord cutting might be on the decline. TDG recently found that broadband users “moderately” or “highly likely” to cut the cord have dropped by nearly 20% in the last year. This is the biggest decline in five years, according to their findings. Does this mean the cord cutting crisis is over? Not quite – but it is looking better for CSPs trying to manage the OTT trend.
OTT services are already getting old. 1 out of 5 households cancelled at least one OTT service in the last year, according to Parks Associates. OTT video churn is climbing as more streaming options enter the market and content producers adapt to the climate. For example, trends show that many OTT streamers cancel service after watching specific content. Big television events may boost subscriptions, but result in churn shortly after. Even worse? Many consumers stream this content for free by taking advantage of free trial periods. Cable subscriptions, on the other hand, continue to provide value beyond a single season of a popular show, and therefore inspire more loyalty.
Rural CSPs might still be battling the OTT current for now, but it looks like the tide is changing. If you have had experience fighting cable cutting trends, we’d love to hear about it. Email us at marketing@mapcom.com.