Cowen Survey: 33% of Cable TV Subscribers on Promo Deals

Approaching sticker shock for third of video base could compound cord cutting

A third of U.S. cable TV customers, 33%, are currently paying promotional rates that will soon expire, exposing them to much higher monthly bills for video service.

That’s the conclusion of equity research company Cowen, which reported this morning on a survey conducted June 26-27 with 1,021 U.S. consumers for its Q2 cable TV/satellite video report.

While pay TV operators typically and continuously manage price promotions, adjusting them in specific regions based on factors like credit ratings and local price elasticity, “the current mix of promotional subscribers within the base is of particular interest amid the current recession and potential for higher risk of ‘sticker shock’ churn,” writes lead report author Gregory Williams.

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Among those U.S. cable TV customers on promo plans, 20% of them have deals that will expire in the next 12 months, the research company said.

Of the major U.S. cable operators, Cowen finds Altice USA most exposed, with 45% of its base on promotional deals. Comcast is second at 42%, followed by Charter Communications (32%).

Cable TV consumers are facing this inflection point as more and more consumers adopt OTT services—76% of those surveyed by Cowen in the latest research said they’re using a streaming service vs. 73% in last year’s survey, and 59% in the survey conducted by Cowen two years ago.

“The rapid increase is largely due to the onset of (1) the Streaming Wars (providing not just a multitude of choices but new low-cost SVOD as well as free AVOD entrants), (2) the current pandemic lockdown, and (3) the rise in unemployment as consumers test-drive low-cost/free solutions to rationalize video wallet share,” Williams notes.

Among consumers polled, 59% reported using Amazon Prime Video vs. 53% in the last Cowen survey; Hulu adoption increased from 33% to 40%.