How skinny basic fared through 2016: report

Eight in 10 Canadians made no significant changes to their cable packages, but half of subscribers are considered "at risk" of cutting the cord.
shutterstock_Quarterly report

Skinny basic is not the solution it was purported to be, based on findings from the latest Cable & Telecommunications Association for Marketing (CTAM) report.

Traditional service providers can breathe a (temporary) sigh of relief in 2016 as most viewers continue to subscribe to traditional services to meet their viewing needs.

With more time having passed since the first phase of skinny basic went into effect in March this year, the report, which documents the impact of cable-packaging changes thus far, highlights key changes in consumer behaviour. But as the market evolves, so does consumer behaviour, with many Canadians still finding TV subscriptions too expensive in the face of other options.

The research, which was conducted by Toronto-based Charlton Strategic Research looked at consumer reactions to various new packages offered under the new CRTC regulations, namely pick and pay, skinny basic and pick 10. A previous report published in November last year examined the possibilities under pick and pay.

A year later, the results based on the sample size of 3,155 people across Canada, highlights opportunities amidst a host of challenges for service provides. Key among those is the rise of video consumption, with 60% still coming through traditional services. In its 2013 survey, CTAM reported Canadians watched 27.4 hours of video a week; today that number is up to 29.

It’s not the consumption of video but rather where that consumption is likely to take place in the future, that is a cause of concern for traditional services. More than 50% of Canadians are identified as at-risk subscribers – those likely to cut the cord over time. A typical non-subscriber tends to be female (65%), urban, a renter and younger than the national average.

The skinny basic has lured a small number, with one in 10 saying they switched to skinny basic (5% with only skinny and 3% with added channels). However, 84% of TV subscribers did not alter their programming.

The threat of continued cord-cutting remains. The two key reasons why subscribers want to cut the cord are linked to practical concerns: cost and not watching the channels to which they are subscribed. Among those who did not have service, only 4% stated a likelihood of subscribing to a traditional service, down from 6% last year.

Live viewing is also down, according to this report, with 42% saying they tuned in for paid, scheduled TV watching, compared with 46% in 2015 and 52% in 2013 (though that might be tied to the disappointing 2016 NHL-post season). Moreover, scheduled TV watchers tend to be significantly older, with 61% in the 55+ age group opting for live compared with 16% in the 18-to-24 category.

The report also distinguished between two key demographic groups, showing differences in consumer behaviour between millennials and those above 35. Breaking up the data by demo shows that millennials were far more likely to adjust their post-pick-and-pay services that the other group: 25% made some kind of change to their programming compared with 14% in the higher-age group.

The report’s recommendations include channel branding and linking of content to channels, the continued adoption of a TV Everywhere approach, as well as options for better pricing based on individual preferences especially for millennial audiences.