Monthly digital subscription costs are overtaking those of Cable TV, and not many consumers seem to care.The growing devolution of paid television consumption continues as subscribers leave cable in growing numbers. According to Frank N. Magrid Associates, 2.9% of paying TV customers are “very likely” to cancel their service in the year ahead, up over the 2.2% who answered the same in 2012.Even though consumers are eschewing the traditional monthly cable or satellite service, they are still opening their wallets for monthly digital subscriptions of one sort or another.A recent story on MarketWatch posits that consumers are now potentially paying more in monthly subscriptions than what they would pay for the average cable bill.MarketWatch added together many popular monthly digital subscriptions, including dating websites and online gaming, and found that the cost came to $156, well above an average cable television subscription cost of $112 a month, according to research firm SNL Kagan.The reason for this shift is both practical and psychological. According to Nielsen, Americans only watch 17 out of 189 available cable channels, so the practical value of a typical cable package certainly isn’t there.Secondly, digital economy has allowed for media consumption based on personal choice that wasn’t previously possible when cable was the only medium offering news and entertainment.Duy Linh Tu, director of the digital media program at Columbia University, thinks there’s a psychological component as consumers are showing a preference for multiple monthly subscriptions of $4.99 or $9.99 instead of the comparatively large financial hit of one monthly cable bill. “People just think $5 is the same price as a sandwich,” he says.As more and more consumers ditch the monthly cable bill, it’s good news for the digital subscription economy as a whole. Consumers are willing to shift their spending to other monthly subscriptions, so the money is there for the taking. Incumbent on those selling these subscriptions is to avoid the mistake of cable by offering customers real value for the price they pay, or else consumers will soon turn them off as well.
| 5 Ways Subscription Businesses Can Thrive in Uncertain Times
Taking strategic actions is the key to growing recurring revenue during uncertain times. This session reveals the few vital actions subscription business leaders should take immediately to focus their team and themselves on growth over the next few months.
This free webinar is April 15, 2 PM Eastern.