TV and the Internet Toward a More Perfect Union

Television and Computer


As television and the internet become more integrated, satellite and cable providers are presenting a plethora of new subscriber packages. Grassroots℠ Research shows that consumers are captivated, with many inclined to negotiate new package agreements.

Interviews with 1,000 cable or satellite subscribers in the US revealed that 89% subscribed both to television (cable/satellite) and internet service in the past six months, while 11% subscribed to television only. Furthermore, 24% currently subscribe to Comcast, followed by DIRECTV at 17%, Time Warner at 10%, AT&T U-Verse at 9% and Verizon FIOS at 8%. Also, 40% of our sources spend $100–$149 per month on cable/satellite and internet service, while 33% spend more, and 28% spend less.

Meanwhile, 47% of sources contacted their cable/satellite provider in the past 24 months to negotiate a new package agreement, including 32% who changed their contract terms (among these, 43% downgraded to a package with fewer channels; 34% upgraded primarily to obtain more channels; 21% upgraded primarily to get faster internet speed; and 2% downgraded to internet only). Among the 43% who downgraded to a package with fewer channels, 71% are somewhat or very satisfied, while 29% are somewhat or very unsatisfied.

Among sources who downgraded to internet only, 58% are somewhat or very satisfied, while 42% are somewhat or very unsatisfied. Among the 47% who contacted their cable/satellite provider to negotiate a new package agreement, Netflix currently is the streaming service to which they most frequently subscribe (52%), followed by Amazon Prime (39%) and Hulu (13%).

Sources who contacted their provider and remained on their current plan as well as those who upgraded to a plan with more channels or to get faster internet were asked why they did not downgrade to a less expensive plan. Forty percent like their current plan, 30% did not want to downgrade their internet speed, and 17% each did not want fewer sports channels nor fewer premium movie channels.

Television only vs. TV + Internet
% of subscribers

TV and internet chart

Source: GrassrootsSM Research


China's Banks Are Looking Less Shadowy



As China's banking industry sets out to improve transparency, Grassroots℠ Research analyst Joey Wong says a new breed of lower-risk wealth-management products and a healthier mortgage market support a more positive view of the country’s banks

Concerns about China's banks

For years, some market-watchers have voiced concerns about the health of China's banks and questionable sales of wealth-management products (WMPs). These investment vehicles offer attractive yields and imply backing by the issuing banks, yet their portfolios are not always transparent and banks frequently do not record them on their balance sheets – giving rise to fears of systemic risk.

Loan default rates are low and many of our respondents expect it to stay that way

When our GrassrootsSM Research team recently talked to bank branch managers in China about these issues, we found that demand for WMPs remains strong. But there is growing consumer interest in a new, more transparent product. We also found ample evidence of a healthy mortgage market that supports our generally constructive perspective on these banks.

Our key findings

  • Most of our sources said WMP sales trended up between December 2016 and February 2017 by an average of 11% – as other investment options, such as stocks and housing, remained unattractive.
  • Loan quotas are expected to stay unchanged this year due to government efforts to curb the overheated housing market and general concerns about China's business environment.
  • Our sources expect mortgage loans in 2017 to remain the main source of loan business, while property-backed consumer loans should see significant growth.
  • Two-fifths of our sources expect the loan default rate to remain flat in 2017, but half expect it to trend higher.
  • Still, most believe the overall loan default rate will stay low, and we did not find any sign of default risk increasing in recent months.

Property-backed consumer loans should see significant growth this year

Wealth management at NAV

Our GrassrootsSM study also found that net-asset-value–type WMPs have gained traction among banks and customers, which Research Analyst Helen Ye found interesting: "NAV-type products remove the implicit-guarantee obligation from banks and require them to educate customers about their own risk exposure."

Mortgages are considered a healthy and lucrative business for China's banking sector

The findings about muted loan growth and continued reliance on mortgages as the primary source of new loans are similarly encouraging. "Mortgages are considered a healthy and lucrative business for the banking sector," said Ms. Ye. "These results run counter to the market's concerns about continued excessive credit growth in China's economy and are supportive of our investment perspective on China's banks."


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