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US consumers have been “cord-cutting” — or canceling their pay-TV subscriptions in favor of internet-delivered alternatives — since 2010.
The number of pay-TV subscribers dropped a record 3.4% year-over-year (YoY) in 2017, and the rate of decline is expected to accelerate further in the coming years. As a result, traditional media companies will continue to see their most important revenue stream erode. To compete in the shifting media landscape, traditional media companies’ business strategies must satisfy two goals: extract as much revenue from pay-TV as possible before the opportunity to do so fizzles out, and taper reliance on pay-TV-related revenue along the way.
In this report, Business Insider Intelligence will look at how big media companies are refining their strategies to meet the aforementioned goals and mitigate the impacts of cord-cutting that are detrimental to their business. We also discuss current consumer behavior trends that are simultaneously driving the growth of streaming platforms (like Netflix) and decline of linear TV, as well as actionable insights on how companies can respond.
Here are some of the key takeaways from the report:
As consumers flee linear TV, they’re spending more time on digital video services with ad-free and ad-lite viewing experiences.
Media companies are responding by becoming less reliant on pay-TV revenue by launching their own streaming services.
Traditional networks are also increasingly seeking M&A opportunities to gain the resources, talent, and technologies necessary to compete with streaming giants.
More media companies are beginning to experiment with airing fewer commercials per hour to enhance the linear TV viewership experience.
In full, the report:
Explains the decline in US pay-TV subscribers in recent years, and how significantly this decline has diminished the viewership and ad revenue of top TV networks.
Outlines the top factors that consumers look for when deciding to subscribe to a streaming service.
Details the top recent M&A deals between media companies, and describes how they’ve positioned those involved to better compete against streaming giants like Netflix.
Provides direction on how to best approach cutting ad loads on linear TV, and explains why experimenting with airing fewer commercials could be beneficial for viewership.
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Source:: Business Insider