Pay TV has over $100 billion in revenue in the U.S., with a wide array of large and small firms vying for a piece of the action. As recently as 2012, over 90% of U.S. households subscribed to cable, satellite, or another pay TV service. But the market is in turmoil, despite attempts to suggest it’s business as usual, because that proportion has dropped in recent years. Now, many cord-cutters (people who have ended their pay TV subscription) and cord-nevers (those who have never subscribed) are using streaming video services instead.
Does Original Content Help Streaming Services Attract More Subscribers?
The pay TV market is in turmoil due to cord-cutting (people ending their pay TV subscriptions), and many people are turning to streaming services to watch shows and movies. Streaming content providers are investing more and more in developing original content, but is there evidence that this content leads people to subscribe to streaming services? Researchers analyzed data on subscribers and streaming services and found that people were not more likely to subscribe to a streaming service just because it offered content from a certain TV channel. After studying other factors, the authors conclude that a streaming service can’t rely on offering others’ content to drive subscriptions; original content is an important way to differentiate from competitors.