Voice of the Customer

The era of the broadband and TV bundle is nearing an end according to new research from Zen Internet, with millions of households no longer seeing its value.

In fact, two million of the 10 million UK households that have a broadband and TV bundle, are considering unbundling (ie separating out tv and broadband services) from their package deals, while over one and a half million (1.7m) have already done so. This comes as streaming has been found to offer the most value for money, with the average service costing subscribers just 23p per hour watched, five and a half times less expensive than the average sports package (£1.30).

The cost of TV

As more channels and streaming services are becoming available, Zen’s analysis of the Broadcasters’ Audience Research Board (BARB) viewing data coupled with its own consumer survey found the average TV or streaming subscription service costs 41p per viewing hour.

Despite the costs, some UK viewers are still willing to pay for fear of missing out. Almost three million (2.9m) households feel they pay too much for their TV services but admit they don’t want to lose access to them. This is backed up by further evidence with sports channels such as Sky Sports (73%) and BT Sport (67%) rated as important packages despite their high cost per viewing hour. When it comes to children’s entertainment, less than half (47%) of households viewed dedicated kids channels as important, despite their relatively low cost-per-hour value of 16p per hour.

Richard Tang, Founder and Chairman of Zen, said: “Even before the pandemic hit, it was clear to see viewing habits were changing with increased popularity of streaming services versus traditional TV packages. However, there are still a lot of people that rightfully don’t want to lose out on their TV subscriptions. Fortunately, with the emergence of ultrafast broadband, consumers no longer need to be tied into broadband and tv bundles where they’re getting value from some channels, but not from others. Today, consumers should know they can pick and choose their channels and services without being tied to a bundle, including their favourite sports packages, making use of a separate broadband connection that reliably underpins it all.”

The age of streaming

The lockdown has further accelerated the era of streaming according to the research figures. Over lockdown 1.6 million households signed up to a new streaming service and now intend to keep it. A further 1.6m households are also considering increasing the number of subscriptions they have over the next 12 months.

Young people are much more likely to subscribe to a streaming service, with 76% of 18-24 year olds paying for Netflix (50% average), 51% paying for Amazon Prime TV (38% average) and 28% paying for Disney+ (16% average).

Over a quarter (28%) of houses have at least one streaming service alongside the TV licence, amounting to 7.7 million households. A further 6.1 million households have two streaming services, while three million have three streaming services.

While the UK is clearly in a streaming now era, consumers are in danger of losing track of costs. Many households do not keep on top of their subscriptions, with 1.3 million having no idea when their annual TV subscription ends and 800,000 never paying attention to changes in the price of their streaming service subscriptions.

Tang added: “It’s vital that consumers take the time to understand when they’re subscriptions are due to end or face being tied to packages they don’t want for another year, or indeed significant price hikes as soon as they are out of contract. Ensuring they’re with a reliable internet provider will go a long way to helping consumers take advantage of the streaming services they do want.”

Key points again:

  • Over a million and a half (1.7m) already unsubscribed from broadband and TV bundles due to poor value
  • Streaming services cost on average 23p per hour watched, just over half the average for TV and streaming subscriptions combined (41p)
  • Sports packages (£1.30) found to be most expensive at five and half times the average streaming cost
  • Over a million and a half (1.6m) have signed up to a streaming service during lockdown and intend to keep it.

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