Convergence report suggests trouble ahead for skinny bundles

The latest edition of Convergence Research Group’s Couch Potato Report says PayTV revenues in the US declined by 3% last year to $103.4bn while online video streaming service increased revenues by 37% to $16.3bn. However one of CRG’s most interesting findings is that skinny bundles don’t seem to be gaining traction.

Skinny Bundles have become much more prominent in the market over the last two years as traditional cable and satellite operators, plus some new market entrants, have sought to establish a programming alternative to Netflix, Amazon and Hulu.

However CRG’s finding is that this new mid-market is not proving compelling enough to win over US consumers. CRG’s assessment is that: “Attempts to convert cord cutters to skinny bundle subscribers won’t pay off. With lacklustre margins, programming gaps and technical issues, live multichannel OTT provides little counter to category killers Netflix & Amazon that sell at lower price points and essentially without advertising. We believe a number of OTT plays, including large and niche, will fail due to insufficient subscriber traction, cost, and competition.”

Among other key findings, CRG expects the number of streaming subscribers in the US to surpass PayTV subscribers sometime during 2019.