Cable and satellite TV providers in Canada face stiff competition from video streaming services, as they do in the U.S. and worldwide. Add in the fact that the Canadian Radio-television and Telecommunications Commission has mandated that providers offer a “skinny” TV channel package with a $25 cap by December 2016, and sometimes things can look a bit dreary for the industry.
However, new research from J.D. Power is showing that skinny bundles may actually help pay TV service providers stay relevant in the market and coexist with alternative services.
According to the “J.D. Power 2016 Canadian Television Provider Customer Satisfaction Study” and “J.D. Power 2016 Canadian Internet Service Provider Customer Satisfaction Study,” customer satisfaction is highest when there is flexibility to “pick and pay” for TV channels to add to their skinny program bundle at an affordable price.
“Customers have long desired flexibility to pick and choose their own TV packages and not be forced to subscribe to channels they have no interest in watching,” Adrian Chung, director in the telecom, media and technology practice at J.D. Power, says. “Having the option to choose a skinny TV package with channel upgrade options helps to meet that demand and for some, creating more room in their budget for streaming video content. Instead of a growing number of so-called cord cutters, there is high perceived value in paying for access to content that isn’t available through standard programming, leading more customers to use a combination of services to meet their viewing needs.”
The adoption of the likes of streaming services is on the rise, as 49 percent of TV customers indicate they have used one in the previous 12 months, compared with 42 percent in 2015, J.D. Power reports.
Satisfaction is said to be highest among customers with a skinny service that allows them to expand and choose additional channels individually (761 on a 1,000-point scale), surpassing satisfaction among those with premium service (738), as well as those with a preset expanded basic package (708) or basic cable (700).
More than one-fourth (28 percent) of customers have a skinny package that costs $25 or less, and 13 percent of customers pick and pay for additional channels above their skinny package. Satisfaction with cost is also high among customers in this group, which is J.D. power points out as encouraging for TV providers as they generally receive much lower ratings than alternative video services on cost of service (6.0 on a 10-point scale vs. 7.8, respectively).
