‘No need’, cost main factor holding TV subscribers back from going digital

While there are a growing number of Canadian households that subscribe to a digital television service, a majority of households, or 60%, that have signed up for a television service still appear to be happy with analog cable service, according to results from the 2004 wave of Decima Research’s syndicated consumer research study on digital TV. When asked why they don’t subscribe to digital TV service, 48% of analog subscribers say that they either do not need the service or are not interested in it. Further, 33% of analog subscribers identify price-related factors as another reason for not subscribing, and 55% of analog subscribers who used to subscribe to a digital TV service but no longer do so cite price or cost factors as the reason why they no longer subscribe. These findings suggest that television service providers must provide greater value to digital subscribers, or at least do a better job at communicating the value of their digital services. A case in point is the fact that a majority of analog TV subscribers don’t even know what services, benefits, or features are available from a digital television service. Analog subscribers perceive "access to more channels" and "better picture quality" as top-of-mind attributes in a digital TV service, followed by "a greater variety and choice in programming options," in particular movies and events. Although analog TV subscribers appear to understand that digital television primarily offers a greater range of programming options and superior picture/sound quality than what is available from analog TV subscription services, awareness of specific digital TV services, benefits, or features is low. Almost two-thirds (65%) of analog subscribers say they "don’t know" what services, benefits, or features are available from a digital television service (63% in 2003). The one underlining finding learned from each of our first two waves of The Digital Domain consumer research study is that many Canadians do not understand the services, benefits, or features that are offered as part of digital television services. Digital TV subscribers are confused about what services they actually subscribe to. In particular, reported ownership or usage of advanced digital TV technologies such as personal video recorders (PVRs) or digital video recorders (DVRs) and high-definition television (HDTV) are skewing on the high side. Going further, many TV subscribers cannot even accurately identify which company provides their TV service or even what type of TV service they subscribe to. This consumer confusion is encountered in other surveys on technology in general or digital TV in particular, requiring extensive "cleanup" of the research data in order to yield a more accurate depiction of the digital TV market. To gauge future growth of digital TV penetration, analog television subscribers were asked how likely they are to subscribe to a digital television service within the next year. A total of 7% of current analog subscribers say they will likely subscribe to digital TV within the next year (8% in 2003). More specifically, 3% say they will "definitely subscribe" within the next year and another 4% indicate they will "probably subscribe." Analog subscribers who are not likely to subscribe to a digital TV service within the next year were asked what the likelihood is that they would do so within the next one to two years. A total of 2% say they will "definitely subscribe" within the next one to two years, and another 8% indicate they will "probably subscribe." Decima then asked the full sample of digital TV intenders (n372) which type of digital television service they are most likely to subscribe to. Some 36% say cable, 32% say satellite TV, 3% say wireless cable, and 5% say they would likely subscribe to a digital television service from their local telephone company. These results remain similar to those reported in the 2003 survey. It is important to note that 23% of digital TV intenders do not know what type of digital television service they are likely to get. These are probably consumers who are familiar with digital TV services in a generic sense but have yet to investigate what services are offered in their area and to comparison-shop service providers. The almost one-quarter of digital TV intenders who are undecided about which digital TV platform they would choose represent a tremendous opportunity for digital television providers to craft marketing campaigns to win over these consumers. Pick-and-pay ranks high Decima asked digital TV intenders to rate the importance of 14 digital services, benefits, or features relevant to their decision to subscribe to a digital television service - the same services, benefits, or features we asked existing digital TV subscribers to evaluate. The chart below shows the results of this ranking based on a total of the top two box scores - that is, those who say these features are "extremely important" or "very important" in their decision. A shortened description of these services, benefits, or features is included in the chart due to space limitations. For many of these digital television services, benefits, or features Decima provided a thorough explanation for that feature in order to more accurately gauge importance levels. Digital TV intenders provide ratings of 82% and 78%, respectively, for "ability to pick and pay for only the TV channels that you want" and "better picture quality." These results match the ranking provided by existing digital TV subscribers, as well as the results from the 2003 survey, where the same top two elements of digital TV were mentioned by digital TV intenders. In addition, rankings pertaining to "greater variety of packages" and "better sound quality" were also similar to those provided by existing digital TV subscribers. Decima Research’s The Digital Domain: Consumer Attitudes on Digital Television Services, Benefits, and Features in Canada examines Canadian household television use; cable, satellite TV, wireless cable, and telco TV market share; television service satisfaction levels; and awareness of, interest in, and penetration of various digital television services, benefits, and features. Advanced digital TV services evaluated include pay-per-view, digital specialty TV channels, video-on-demand, PVRs/DVRs, HDTV, and interactive television services. The 2004 wave of Decima’s The Digital Domain syndicated consumer research study is based on a national telephone survey of 2,002 adult Canadians conducted who subscribe to a TV service in May/June 2004. Mario Mota is VP Broadcast/Media Research at Decima Research. For more information on Decima’s The Digital Domain syndicated consumer research study, click here, or contact Mario at (613) 751-5089 or by email at mmota@decima.com. This is the first in a series of articles on the research.

‘No need’, cost main factor holding TV subscribers back from going digital

Broadcast | September 10, 2004

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