SURVEY OF CONSUMERS CONSUMPTION OF PAY AND FREE

TELEVISION PROGRAMMING, PAY AND FREE STREAMING

APPLICATIONS AND TRENDING BEHAVIOR OF SWITCHING
FROM TELEVISION TO STREAMING

Prepared for MKT 543-01

Prepared by
Matthew Kenney, Jason Pucciarelli
& Austin Cooper

December 12, 2017

 EXECUTIVE SUMMARY

Objectives
This study was an investigation of how consumers access television
programming, which services they use to access this programming, what the average
consumers monthly payment for this is, what constitutes an expensive price for this
programming, and the income and age variance with choice of programming service.

Method
A survey was conducted with a random sample of about 100 consumers who
filled out and submitted an Internet-based questionnaire.

Findings Highlights

More than half (54%) of respondents pay for cable in their homes, while more than
3/4 (78%) of respondents subscribe to a streaming service (Netflix, Hulu, Amazon,
etc.).

Sixty-two percent rate the affordability of their programming as either expensive or

very expensive, while only sixteen percent view it as inexpensive.

Half of all respondents pay more than $100 per month for their programming
services.

Of those that subscribe to a streaming service, more than eighty percent (81%) list
Netflix as their primary subscription.

Nearly all (97%) respondents watch for less than 3 hours a day, yet 78% consider
their watching habits to be heavy.

Nearly half (46%) of all respondents have already cut the cable, while 14% plan to
do so within the next 6 months, and only 26 % have no plans to cut the cable.

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 OBJECTIVES

The research was undertaken to investigate consumers programming viewing

habits and methods, with a special focus on the recent trend of cutting the cable.

Descriptive Research Objectives

The following descriptive objectives were formulated for this research effort.

1. How do they access entertainment programming?

a. Do they use antenna, cable, satellite, free streaming, subscription

streaming, or nothing?

b. How often do they utilize these sources of programming?

c. How much do they typically spend per month on their programming?

d. How do they rate the cost of their programming?

2. Do they pay for a streaming subscription?

a. Which streaming subscription service do they pay for?

3. Are they considering switching to streaming only, have they already?

4. How many hours, per day, do they access programming?

5. What are the demographic and lifestyle profiles of the sample?

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Hypotheses

This research team developed five hypotheses or beliefs about consumers

programming choices. The hypotheses are as follows:

Hypothesis 1: At least 90% percent of consumers pay for some form of

programming.

Hypothesis 2: In a typical month, consumers will spend around $150, on average,

to access programming.

Hypothesis 3: More than 50% of consumers think cable/satellite is expensive or

very expensive.

Hypothesis 4: At least 90% of consumers age 35 and below use streaming

services for some of their programming.

Hypothesis 5: At least 75% of consumers watch 3 hours or less of programming

per day.

Differences and Relationship Objectives

Further discussions as to marketing actions and tactics that might be forthcoming

from findings in the survey, led to the following differences and relationship objectives.

1. Are there differences in type of programming consumed based on age?

2. Do cost ratings for programming differ by demographics?

3. Does willingness to cut the cable differ by demographics?

4. Does monthly cost of programming have a strong correlation with price rating?

5. Does education level have an impact on monthly cost?

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6. Does having children in the home have an effect on programming types

consumed?

7. Are there other interesting or meaningful differences or relationships found in the

survey?

4
Statistical Analysis

Statistical analyses were performed with the use of the SPSS, a widely used

analysis program. Data analyses, findings, tables, figures, and the CMGs interpretations

of these items are found in the following section of this report.

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 PROFILE OF THE SAMPLE
As described earlier, the survey relied on random sampling, meaning that the final

sample is representative of the general population. However, the final sample may not be

perfectly representative of the general population. Accordingly, a profile of the sample

demographics and life style dimensions can be used to gain an understanding of the

nature of the individuals who took part in the survey.

The questionnaire included the following demographic question and life style
dimensions:
Ethnicity
Age
Education Level
Employment Status
Household Income
Gender
Marital Status
Number of Children

The following pages report the survey findings pertaining to these questions.

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Ethnicity

Figure 1 presents the findings of the respondents ethnicities. As shown, the

majority of respondents were white, with a small number of African American and

Hispanic respondents as well.

Figure 1
Respondents Ethnicities

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Ages

Figure 2 represents the ages of all respondents. As is evident, younger age groups

were much more representative of respondents.

Figure 2
Respondents Ages

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Education Level

Figure 3 shows the education level of all respondents. As you can see, the major

representative class is those with some college, as much of the data was collected from

our fellow students.

Figure 3
Respondents Education Levels

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Employment Status

Figure 4 presents the findings of the respondents employment statuses. As with

their education levels, the majority list their employment as Student

Figure 4
Respondents Employment Statuses

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Household Income

Figure 5 presents the findings of the respondents household incomes. As the

majority list their employment as Student, the preponderance of respondents making

under $20,000 is an expected outcome of this data.

Figure 5
Respondents Household Incomes

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Gender

Figure 6 presents the findings of the respondents genders. As can be seen, there

was an approximate even representation of males and females, with males representing a

slight majority (56%).

Figure 6
Respondents Genders

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Marital Status

Figure 7 presents the findings of the respondents marital statuses. As shown,

respondents are fairly diverse in their marital statuses, with single and married being

fairly close, with domestic partnerships a distant 3rd.

Figure 7
Respondents Marital Statuses

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Children in the Home

Figure 8 represents the data on whether respondents have children in their homes.

There was a majority of childless homes among respondents.

Figure 8
Children in the Home

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Number of Children

As can be seen in Figure 9, those respondents homes that do have children have 3

or less, and generally trend more toward 1 child in the home.

Figure 9
Number of Children

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Programming Usage by Gender
Tables 10 14 reveal respondent programming usage by gender. One telling

statistic is that only 2 percent abstain from programming, and all abstaining are female.

Table 10
Cable Use by Gender

Use Cable?
Yes No
Gender Male 60.7% 39.3%
Female 45.5% 50.5%

Table 11
Satellite Use by Gender

Use Satellite?
Yes No
Gender Male 8% 92%
Female 6% 94%

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 Table 12
Paid Streaming by Gender

Use Paid Streaming?

Yes No
Gender Male 85.7% 14.3%
Female 68.2% 31.8%

Table 13
Free Streaming by Gender

Use Free Streaming?

Yes No
Gender Male 60.7% 39.3%
Female 68.2% 31.8%

Table 14
No Programming Use by Gender

No Programming Use?
Yes No
Gender Male 0.0% 100%
Female 4.5% 95.5%

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Cumulative Usage Percentages

Table 15 shows cumulative usage percentages by gender. As one can tell, the

percentages add to over 100%, as some respondents selected more than one response for

type of programming.

Table 15
Cumulative Programming Use Percentages

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Daily Hours of Programming

Table 16 shows the data collected for daily hours of usage. As is shown, nearly

100% watch less than 3 hours of programming today, while there are outliers that watch

3-6 hours, and that watch 6-9 hours daily.

Table 16
Hours of Programming Watched

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 Programming Consumption Confidence Intervals

90% Proportion Confidence Interval

Table 17 shows the 90% confidence intervals for the proportions of types to
programming consumed by the respondents.

Table 17
Proportion Confidence Intervals (90%)
Programming by Type

Programming Percent Confidence Int. (90%)

Cable 54% 45.8 - 62.2%
Satellite 14% 8.29 - 19.71%
Paid Streaming 78% 71.19 84.81%
Free Streaming 64% 56.1 71.9%
None 2% 0 4.3%

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95% Proportion Confidence Interval
Table 18 shows the 95% confidence intervals for the proportions of types to
programming consumed by the respondents.

Table 18
Proportion Confidence Intervals (95%)
Programming by Type

Programming Percent Confidence Int. (95%)

Cable 54% 44.2 63.8%
Satellite 14% 7.2 20.8%
Paid Streaming 78% 69.9 86.1%
Free Streaming 64% 54.6 73.4%
None 2% 0 4.7%

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99% Proportion Confidence Interval
Table 19 shows the 99% confidence intervals for the proportions of types to
programming consumed by the respondents.

Table 19
Proportion Confidence Intervals (99%)
Programming by Type

Programming Percent Confidence Int. (99%)

Cable 54% 41.2 66.8%
Satellite 14% 5.1 22.9%
Paid Streaming 78% 67.3 88.7%
Free Streaming 64% 51.6 76.4%
None 2% 0 5.6%

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 Consumption Hours Confidence Intervals

90% Confidence Interval for the Mean

Table 20 shows the 90% confidence interval for the mean of daily hours programming is
consumed by the respondents.

Table 20
Mean Confidence Interval (90%)
Hours Programming Consumed

Test Value = 0

Mean 90% Confidence Interval of

Sig. (2- Differenc the Difference

t df tailed) e Lower Upper

How
Many
42.820 99 .000 1.040 1.00 1.08
Hours
Daily

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95% Confidence Interval for the Mean
Table 21 shows the 95% confidence interval for the mean of daily hours programming is
consumed by the respondents.

Table 21
Mean Confidence Interval (95%)
Hours Programming Consumed

Test Value = 0

95% Confidence Interval

of the Difference

t df Sig. (2-tailed) Mean Difference Lower Upper

How Many
42.820 99 .000 1.040 .99 1.09
Hours Daily

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99% Confidence Interval for the Mean
Table 22 shows the 99% confidence interval for the mean of daily hours programming is
consumed by the respondents.

Table 22
Mean Confidence Interval (99%)
Hours Programming Consumed

Test Value = 0

99% Confidence Interval of the

Mean Difference

t df Sig. (2-tailed) Difference Lower Upper

How Many
42.820 99 .000 1.040 .98 1.10
Hours Daily

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 HYPOTHESIS TESTS

Hypothesis Tests

As noted in the objective sections of this report, the research team developed five

hypotheses or beliefs about consumers programming choices. The hypothesis is as

follows:

Hypothesis 1: At least 90% percent of consumers pay for some form of

programming.

Hypothesis 2: In a typical month, consumers will spend around $150, on average,

to access programming.

Hypothesis 3: More than 50% of consumers think cable/satellite is expensive or

very expensive.

Hypothesis 4: At least 90% of consumers age 35 and below use streaming

services for some of their programming.

Hypothesis 5: At least 75% of consumers watch 3 hours or less of programming

per day.

Each hypothesis was tested using the data obtained in the sample of survey findings. The

findings are as follows:

Hypothesis 1: The hypothesis that 90% of consumers pay for some form of

programming was supported by the research. The research found that 92% of consumers

reported paying for some form of programming.

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 Hypothesis 2: The hypothesis that consumers will spend around, $150; on average to

access programming was not supported by the findings. The average spent on

programming was $125 per month with a 95% confidence interval computations

determined the range to be between $112 and $138.

Hypothesis 3: The hypothesis that more than 50% of consumers think cable/satellite

is expensive or very expensive was found to be supported by the findings. 59% of

consumers found cable/satellite to be expensive or very expensive.

Hypothesis 4: The hypothesis that at least 90% of consumers age 35 and below use

streaming services for some of their programming was found to not be supported by the

findings. Only 86% of consumers age 35 and below were found to use streaming services

for their programming viewing.

Hypothesis 5: The hypothesis that at least 75% of consumers watch 3 hours or less of

programming per day was found to be supported by the findings. 97% of consumers

reported watching less than 3 hours of programming per day.

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 LIMITATIONS OF THE RESEARCH

Research Errors
When conducting a survey there are various types of errors that can occur. The

two major types of errors that occur within this survey are respondent errors and

sampling error.

Respondent Errors

Respondent error often occurs when respondents misinterpret questions or

demonstrate other sources of respondent error such as: refusals to participate in the

survey, refusals to answer specific questions, or response bias (such as yea saying). To

help reduce these errors, the questionnaire was prepared according to guidelines that

minimize these errors. In addition, the questionnaire was scrutinized for face validity,

meaning that, on the surface, the many questions were worded in ways that seem to ask

the questions in an understandable manner.

Sampling Error

Sample error occurs when the respondents to a survey do not accurately represent

the population from which they are selected. Because the survey relied on random

sampling procedures, the sample should be representative of the community. However,

with several non-respondents, it is possible that the final sample is not perfectly

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representative. Consequently, a demographic profile was provided for purposes of

comparison to the actual community body demographic profile by interested parties.

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 SUMMARY AND CONCLUSIONS

This survey was performed to answer a number of questions that are listed as research

objectives in the Objectives section of this report. These objectives have been recast

into specific questions, and in the following sections, the research team has prepared

concise summaries in bullets to each question based on the findings that are provided in

detail in the previous section of the report. Each summary is followed by a conclusion

drawn from the findings.

How do consumers access, utilize, pay and rate their programming

services?

Question: How do they access entertainment programming? Do they use

antenna, cable, satellite, free streaming, subscription streaming, or nothing?

Findings Summary

78% of consumers use paid streaming for entertainment services

64% of consumers use free streaming for entertainment services

54% of consumers use cable for entertainment services

14% of consumers use satellite for entertainment services

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 2% of consumers use no services

Conclusion: The majority of consumers are using paid streaming services, free

streaming, and cable for their entertainment programming services.

Question: How often do they utilize these sources of programming?

Findings Summary

89% of respondents reported never using antenna

2% of respondents reported rarely using antenna

4% of respondents reported sometimes using antenna

6% of respondents reported using antenna often

50% of respondents reported never using cable/satellite

9% of respondents reported rarely using cable/satellite

18% of respondents reported using cable/satellite sometimes

20% of respondents reported using cable/satellite often

3% of respondents reported using only cable/satellite

26% of respondents reported never using free online streaming

4% of respondents reported rarely using free online streaming

17% of respondents reported sometimes using free online streaming

51% of respondents reported using free online streaming often

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 2% of respondents reported using only free online streaming

14% of respondents reported never using paid online streaming

2% of respondents reported rarely using paid online streaming

10% of respondents reported sometimes using paid online streaming

67% of respondents reported using paid online streaming often

7% of respondents reported only using paid online streaming

Conclusion: The majorities of respondents are utilizing paid online streaming and

free online streaming services often.

Question: How much do they typically spend per month on their

programming?

Findings Summary

50% of respondents pay less than $100 per month

42% of respondents pay between $101-200 per month

8% of respondents pay between $201-300 per month

Conclusion: The majority of consumers are spending less than $100 per month on

programming.

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 Question: How do they rate the cost of their programming?

Findings Summary

59% of respondents found cable to be expensive or very expensive

26% of respondents found cable to be somewhat expensive

15% of respondents found cable to be inexpensive

Conclusion: The majority of consumers found the cost of cable to be expensive or

very expensive.

Which subscription services are consumers willing to pay for?

Question: Do you pay for a paid online subscription service?

Findings Summary

84% of respondents pay for a subscription service

16% of respondents do not pay for a subscription service

Conclusion: The majority of consumers are paying for a subscription service

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 Question: Which paid online streaming subscription service do they pay for?

Findings Summary

84% of respondents who have a subscription use Netflix

9% of respondents who have a subscription use Hulu

7% of respondents who have a subscription use Amazon

Conclusion: The majority of consumers who have paid online streaming

subscription services use Netflix as their primary choice

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Have consumers decided to switch to only streaming?

Question: Are they considering switching to streaming only, have they

already?

Findings Summary

47% of respondents have already cut cable

26% of respondents have no plans to cut cable

13% of respondents are unsure if they will cut cable

12% of respondents will cut cable in 1-6months

2% of respondents will cut cable in 6-12 months

Conclusion: The majority of consumers have already cut cable with another 14%

planning to cut cable in 6-12 months.

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How many hours are consumers spending per day watching

entertainment programming?

Question: How many hours, per day, do they access programming?

Findings Summary

97% of consumers reported watching less than 3 hours of

programming per day.

2% watch 3-6 hours per day

1% watches 7-9 hours per day

Conclusion: The majority of consumers only consume less than 3 hours of

programming per day.

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What are the demographics of the survey respondents?

Question: What are the demographic and lifestyle profiles of the sample?

Findings Summary

56% identified as male

44% identified as female

62% identified as White

20% identified as Black/African American

52% are between the ages of 18-24

58% have some college, but no degree

46% are students

36% make less than $20,000 per year

32% are single

70% have no children in the home

Conclusion: The demographic of the sample size can be seen as a white male

between the ages of 18-24 with some college but no degree. They are students

that make less than 20,000 dollars per year, are single and have no children in the

home.

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