Never Never Land

I paid my cable TV bill the other day.  It’s a lot of money each month but the fact that the amount also covers my high-speed internet access and office phone mitigates the expenditure, I guess.  I know my kids don’t see it the same way, and from a lot of the numbers that researchers are reporting, neither do their peers. 

Consumers are shutting off their cable and satellite TV connections in droves.  Nearly half a million subscribers did so in the second quarter, according to the folks at  Leichtman Research Group Inc.  The cable guys will tell you that it’s really a drop in the bucket and they’re right.  49 million folks still have those cable connections and another 34 million have satellite dishes.  So what’s the big to-do?  Those drops have the potential to run into a flood if you look inside the numbers and at how people are watching as well.

Take a look at some information put forward by the Forrester folks in their recent study of cord-nevers.  As explained by this piece in Digital Trends:

Based on a recent survey of 32,000 adults conducted by data analysis firm Forrester Research, roughly 18 percent of Americans have never actually subscribed to premium TV service through a cable or satellite company. While the majority of those respondents were at least age 32 and over, about seven percent of ‘cord-never’ Americans are between the ages of 18 and 31; a prime marketing demographic for advertisers.

Furthermore, the growth rate of cord-nevers suggests that roughly 50 percent of Americans under the age of 32 will have never subscribed to a premium TV service by the time we reach 2025. That’s a massive segment of the population that will be turning to digital delivery services rather than calling up their local cable company for a stack of set-top boxes and a hefty monthly bill.

I’ve stated before that I believe the TV distributors we have will trade the program pipes they have today for internet pipes tomorrow.  Rather than spending money paying fees to the program distributors, they’d be far better served spending the money to upgrade their pipes and building better connections to move video to their subscribers.  While today’s college kids (and tomorrow’s consumers) don’t know a world without high-speed internet access, as cord-nevers they won’t miss the cable subscription.  They might also just be the customers today’s marketers think have gone missing unless they rethink their use of traditional TV.

Cable and satellite subscriptions aren’t going away any time soon, but the one size fits all bundle of program services is.  It will have to in order to retain the consumers who now program their own viewing.  With a minority of viewing to entertainment programs happening live, the operative word will be choice and control.  Consumers expect that along with their monthly bill, and it will be interesting to see if the cable and satellite guys are listening.

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Filed under Consulting, digital media

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