PORT WASHINGTON, NEW YORK, April 10, 2012
According to The NPD Group, a leading market research company, the average pay-TV subscription for basic pay-TV service and premium-TV channels in the U.S. reached $86 in 2011. As TV program licensing fees have risen, pay TV monthly rates have also grown an average of 6 percent per year, even as consumer household income has remained essentially flat. If nothing changes, NPD expects the average pay-TV bill to reach $123 by the year 2015 and $200 by 2020.
“As pay-TV costs rise and consumers’ spending power stays flat, the traditional affiliate-fee business model for pay-TV companies appears to be unsustainable in the long term,” said Keith Nissen, research director for The NPD Group. “Much needed structural changes to the pay-TV industry will not happen quickly or easily; however, the emerging competition between S-VOD and premium-TV suppliers might be the spark that ignites the necessary business-model transformation of the pay-TV industry.”
Based on the latest information from NPD’s “Entertainment Trends in America” report, pay-TV cord cutters reported cancelling their subscriptions primarily because of economic considerations; however, they are still accessing TV programming from free-to-air broadcast, free Internet TV, as well as via lower-priced subscription video-on-demand (S-VOD) services, like Netflix.