US cord-cutters spend an average of $85 per month on OTT services

Recent data released by Parks Associates indicates that cord-cutters are spending $85 per month on average for their online pay-TV or standalone subscription-based services, representing approxiamtely $30 less than what they were paying for traditional pay-TV service. “Cost concerns drove many consumers away from traditional pay-TV, and OTT services are delivering on the promise that they can offer desired video content at a considerably lower price point,” said Elizabeth Parks, President, Parks Associates.

 The researcher’s "Quantified Consumer: Cutters, Nevers, and the Rebundling of Video" report analyzes consumer trends in unbundling video services and the recent phenomena of consumers rebundling their service portfolio because of a fragmented video content marketplace. “But we find 47% of cord-cutters subscribe to four or more OTT services, so in order to have an optimal video portfolio, they are creating their own video bundles by stacking OTT services," Parks said.

Consumers who opted to suspend their Pay-tv services currently spend nearly twice as much monthly on OTT services as cord-nevers. There are more than six million US broadband households who have never subscribed to traditional TV, and they are also less likely to own key streaming video products such as smart TVs and streaming media players. “As they migrate away from traditional pay-TV, cord-cutters seek service offerings that more closely meet their video content needs with the added value of flexibility at a lower cost,” Parks said.

On the contrary, 58% of cord-cutters own a smart TV, which is roughly equivalent to the national average, so cord-cutters demonstrate an affinity to video content and services that make them a valuable segment for providers to target. “OTT services have to continually deliver flexibility and customization at a reasonable cost to keep these subscribers engaged and retain them on an ongoing basis,” Parks said.