Luxury TV in the Age of Skinny Bundles: ARPU among High-Income Households, 2015-2025

As the middle class evaporates and the ‘barbell’ economy takes its place, television is transforming from a mass-market broadcast medium into a series of highly-customized entertainment services consumed on a personal basis. This requires operators to fine tune offerings to meet the demands of increasingly-specific user segments.

For example, vast resources are being spent on designing services for younger, low-income Millennial viewers. While these efforts are not misplaced, they have unfortunately resulted in a myopic ‘race to the bottom’ at a time when creating premium TV services for High-Income Households (those earning $150K or more annually) offers tremendous upside.

This report provides a first-ever analysis and forecast of how this segments spends (and will spend) on a number of key services, including broadband, mobile, and video services (including Legacy TV and OTT) between 2015 and 2015. TDG examines three possible scenarios: a base case in line with current revenue strategies; a downside case where the industry suffers a collective $5 billion shortfall relative to the base case; and an upside scenario in which the industry captures more than $12 billion in incremental spend by High-Income Households relative to the base case.

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