By the end of this year, 31.2 million US households will have cut the cable TV cord in aggregate. And 6.6 million households will cancel their pay TV subscriptions.
By 2024, more than one-third of US households will have cut the pay TV cord.
That leaves 77.6 million US households with cable, satellite, or telecom TV packages, down 7.5% year-over-year, the biggest such drop ever.
Furthermore, that total is down 22.8% from pay TV’s peak in 2014. By the end of 2024, fewer than half of US households will subscribe to a pay TV service. Read the rest at eMarketer.
Back in 2012, cost–not competition–was the primary reason customers cut their cable television cords. This is likely still a major factor in cord cutting, but the blossoming of television entertainment options that have grown since then is likely an important factor now.
One-third of cord-cutters said they would not re-install services even if the cost of cable was slashed, according to June 2012 survey results from TechBargains.com.
Of note, despite indications that cord-cutters were going online for their content, research from GfK Media revealed that among those who have cancelled their pay TV service, online options were cited as the reason by less than 1 in 5.
Instead, more than 7 in 10 said that cost was their prime motivator for cord-cutting. This aligns with the TechBargains.com survey results, which found that 83% cut the cord due to costs, with only 17% saying their decision was based on cable and satellite not offering the best quality and variety of content.
It is interesting to note that despite cost being the prime reason for canceling service, a significant proportion of cord-cutters (up to 42% of those aged 51 and over) would not re-install services regardless of price.
28% Were Considering Cutting In 2013
Most pay TV subscribers in North America had no concrete cord-cutting plans, according to a February 2013 study by video discovery platform DigitalSmiths.
Just 4% planned to cut cable or satellite service in 2013, and a relatively minor 1.3% planned to abandon pay television altogether for an online app or rental service.
That being said, a sizeable 28.1% said their plans were still up in the air. Read the rest at eMarketer.
Cable Costs Too Much
Despite 45% of American adults believing cable TV was a waste of money, 81% reported being subscribed to cable or satellite TV services, according to a 2013 survey conducted by Harris Interactive on behalf of CouponCabin.com.
That result could be interpreted a couple of ways:
- Either consumers simply accept that a subscription costs more than they think it should;
- Or they will eventually find cheaper alternatives.
When asked the situations that would motivate them to cut the proverbial cord, the top responses both were cost-related.
That is, 56% of cable subscribers said they would be motivated to cut the cord if there were other, less costly alternatives, and 55% if they couldn’t afford to watch cable anymore.
These two motivators are likely true in 2020 as well, if for different reasons. The COVID-19 pandemic has wreaked havoc on household budgets and there are now a host of less-costly alternatives.
Other situations that could spur cord-cutting include a lack in frequency of TV viewing (which doesn’t appear to be an overriding trend), alternative ways to watch live broadcasts (17%) and watching only a few channels (17%).
Consumers Have Always Wanted The Options Streaming Services Provide
As far back as 2013, American adults were more likely to prefer an “a la carte” (44%) or more individually customized (29%) pay-TV package than the entire “full package” of programming (14%), according to survey results from PricewaterhouseCoopers (PwC).
That makes sense, given research indicating that most TV viewers stick to a maximum of 10 channels. Interestingly, though, the PwC survey finds that preference for “a la carte” packages is lower among young Americans (the most prone to cord-cutting), who are the most likely to favor the full programming package.
While TV viewers may stick to just a few channels, a majority 65% of those who are interested in a customized or “a la carte” package would like to access more than 10 channels to put together such a package.
Respondents indicated that they would be most likely to purchase basic (69%) and premium (67%) cable channels as part of their custom package, with sports (59%) and lifestyle (56%) channels also popular choices. Read the rest at MarketingCharts.
Ad Executives Have Been Preparing For Cord Cutters
Media industry executives felt that over-the-top (OTT) video services such as Netflix were more likely to lead to cord-shaving than cord-cutting behavior, according to a 2013 report from StreamingMedia.com.
Among the 758 executives surveyed, 51% believed that consumers are responding to the emergence of pure OTT video services by cutting back on their pay-TV channel packages and supplementing them with OTT content.
By comparison, 23% feel that consumers are responding by canceling their traditional pay-TV subscriptions in favor of OTT video.
Netflix subscribers themselves appeared to hew more closely to the former view, at least when it comes to content consumption. In 2012, a GfK study found Netflix users saying that their regular TV content consumption was unaffected by their subscription.
Streaming Services Eat Into Premium Cable Consumption
GfK later discovered that a majority of Netflix users said that they watch less premium cable as a result of their subscription.
Subscription streaming service viewing appeared to be eroding consumption of premium cable channels such as HBO and Starz, according to details from a report released by GfK.
The report asked users of Netflix, Hulu Plus and Amazon who previously used premium cable channel or pay-TV service video-on-demand (VOD) services if their consumption of those services had declined as a result of their subscriptions.
55% of Netflix users agreed that that they watch less premium cable as a result of their subscription; 68% of Hulu Plus and 60% of Amazon Prime users concurred.
In 2012, a GfK study found most Netflix users saying that their regular TV consumption was unaffected across a variety of program types. But that survey looked more at broadcast and basic cable programs, including sitcoms and drama re-runs. Read the rest at MarketingCharts.