Linear TV subscriptions have been cannibalized by video streaming alternatives for a decade, partly because on-demand provides more value; partly because some like the lower cost per service; partly because linear value now increasingly comes down to sports, news and unscripted reality content.
But lower overall cost seems less and less a value driver, as many consumers buy four or more streaming services. Most scripted content has largely shifted to streaming delivery.
A recent survey by FinanceBuzz of 1,000 U.S. adults found that 24 percent of households are buying “at least three additional streaming services than they did one year ago,” while another 21 percent of respondents are now paying for two more streaming services.
The point is that consumers are buying multiple services at a higher rate than they did five to 10 years ago.
About 25 percent of respondents spend more than $75 per month on streaming subscriptions. If you assume the typical linear service costs between $60 and $80 a month, it is clear that consumers are not buying streaming services because the necessarily save money.
The issue is where linear TV value will lie, as the shift of scripted content to streaming continues. Even sports now are shifting to streaming delivery, leaving unscripted reality shows and news as the anchors for linear. That will be a declining value proposition for a greater range of customers over time.
I, for example, never watch anything but sports or news on linear, so the entire value proposition comes from just those two types of programming. Most channels never get watched, which always was true, even before streaming.
But the whole value-price relationship keeps getting worse. Not that many younger people watch news channels and more sports content is moving to streaming, perhaps leaving unscripted reality TV as the last bastion of “value” for linear TV, assuming one watches that genre.
The point is that it is fairly hard to justify spending $60 to $80 a month for what boils down to regular viewing of two news channels and one-season viewing of up to two sports channels. The only channels that get watched all year are the two news channels. Looked at that way, the value proposition is even worse.
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