June 26, 2009 - In evaluating the specific characteristics of a winning OTT broadband TV service, TDG asked adult broadband users which payment model they would prefer for such a service. Respondents had four specific answer options from which to choose in addition to a "no preference" option. The results are listed below.
Somewhat surprisingly, only 37% of adult broadband users prefer a free OTT service in exchange for advertising and sponsorships. One would think that this number would have been a lot higher given the offer of free programming, but I guess consumers (a) know such an offering is too good to be true, and (b) would rather pay a monthly fee to avoid ads and sponsorships. If only that were possible....
Recall it was cable companies who long ago convinced consumers that it was okay to both pay for TV programs and put up with advertising. Prior to that point, broadcasters distributed TV programming for free using terrestrial wireless technologies. Over time, cable operators have been able to persuade more than 80% of American households that they must pay to access the best TV content above and beyond the commercials. This dual revenue stream has made cable operators quite successful and thus unwilling to consider any single-stream alternative. Who can blame them - seems to be the best of both worlds.
About one-fourth of adult broadband users prefer a monthly subscription fee much like their current PayTV service, while one-fourth prefer a lower monthly subscription fee augmented with a per-viewing charge for specific non-subscription programs. Approximately 9% prefer a purely pay-per-view service (think iTunes on the TV) while another 9% expressed no preference.
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