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Most Pay TV Subscribers Stay Because It’s Bundled With Broadband, Survey Finds

Deadline logo Deadline 3/22/2017 David Lieberman
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The rumbling under the ground of traditional television is growing louder according to the results of Deloitte’s latest annual Digital Democracy Survey, which polled 2,131 U.S. consumers in early November.

The audit, consulting, tax and advisory firm found that 74% of U.S. households subscribe to pay TV and about two-thirds of these people say they keep it because it’s bundled with internet service.

“Amid these new realities, companies could find fresh opportunities to reach consumers via free content — leveraging in-video advertising, for example,” the report says. “They also might see new opportunities to deliver content and solutions to help consumers cut the pay TV cord — or, alternatively, to show them why there’s value in not cutting the cord.”

The latter strategy might be futile: Only 18% of the Gen Z (age 14 to 19) respondents and 25% of Millennials (age 20 to 33) said that television ads “highly influence” their buying decisions.

Indeed, 99% of Gen Z and Millennials say that they multitask while watching TV – doing an average of four different activities.

As a result, “many companies might discover that TV ads are no longer the most effective avenue for getting through to some audiences,” the firm concludes. “Enlisting online influencers and creating social buzz might matter more.”

Streaming services shouldn’t gloat. About 83% of consumers say that they skip online video ads when allowed, with 67% saying that the majority of mobile ads are not relevant or useful.

About 45% of Millennials say that they use ad-blocking software. That’s a big jump from the previous report for 2015: It showed that 40% of 19-to-25 year olds and 37% of 26-to-32 year olds used ad blockers.

When it comes to picking their favorite source for news, 40% of all consumers cited television — down from 42% in 2015, 48% in 2014, 49% in 2013, and 57% in 2012. Social media sites are up to 19% from 17% in 2015 — and 4% in 2012.

“American consumers continued to stream, binge watch and demand more media in 2016,” Deloitte U.S. media and entertainment leader Kevin Westcott says. “As the growing forces of social media and over-the-top services continue to accelerate, particularly among millennials and Generation Z, the consumer rules.”

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