TelcoTV Could Capture Significant Market Share Given Appropriate Positioning
New Research from The Diffusion Group Suggests that Given Even Minor Cost Savings,
TelcoTV Services Could Capture 25% Market Share in the First Two Years
June 6, 2006 (Dallas, Texas) - New TelcoTV services could take as much as 25% of PayTV subscribers in markets in which such services are introduced, just in the first few years. According to Receptivity to TelcoTV among PayTV Subscribers - Primary Research and Analysis, a new report from The Diffusion Group, there are a sufficient number of ambivalent or dissatisfied cable and DBS subscribers that a competitive offering with even slight cost advantages could be disruptive to the market balance.
"Some 84% of US households now subscribe to some form of PayTV service, be it cable or satellite," said Dale Gilliam of The Diffusion Group. "However, 15% of these subscribers are dissatisfied with the quality of their current PayTV service, and 22% are likely to switch from their current service to a TelcoTV service given some level of cost discount."
"The US PayTV market has evolved to a level of maturity where penetration is stable and growth is contingent upon increasing per-subscriber revenue," said Michael Greeson, CEO of The Diffusion Group and co-author of the report. "There seems to be tacit consent among cable and DBS operators that current average prices are sustainable, as are price increases for basic services. This is a perfect environment for a new player, in this case TelcoTV, to enter the fray."
As US telcos construct responses to cable's 'triple-play' threat, they have realized that the lynch-pin service is video - it is by far the most sticky and churn-resistant service of the bundle, a reality of which US telcos are more than aware. The extent to which consumers are willing to embrace TelcoTV has to date remained uncertain - thus the rationale for TDG's report, Receptivity to TelcoTV among PayTV Subscribers - Primary Research & Analysis.
TDG's latest report features the results of an April 2006 study of more than 1,500 US households regarding awareness of and interest in TV and bundled services offered from their 'local telephone provider.' Central to the report is an analysis of how interest fluctuates relative to different levels of monthly cost savings, a variable which weighs heavily upon interest in TelcoTV offerings.
The report is available at TDG’s website or by contacting the firm at 469.287.8050.
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