Every so often we take a look at the cord-cutting phenomenon. This is the term that applies to the act of getting rid of your cable subscription,
(Photo credit: gbaku)
or as is more frequently the case with young consumers, never having one to begin with. Since the folks at Experian Marketing Services just released some new information on the topic I thought this might be a good time to take another look.
As we’ve discussed here before, I think it’s probably too soon to tell if what we’re seeing in the data below as well as other data at which we’ve looked is a trend or a blip. That said, I think we’re probably getting to the point, especially among young people, where we can begin to draw some conclusion and maybe to adjust our business plans accordingly. Let’s see what you think.
An April 2014 survey published by Experian Marketing Services suggests that 7.6 million U.S. households, or 6.5% of all U.S. households, have now cut the cord–up 44% in the past three years. Ownership of an iPhone or iPad “noticeably increases the odds” that a household will cut the cord, Experian said. Experian notes that nearly 25% of adults between the ages of 18 and 34 who subscribe to a streaming video service like Netflix and Hulu do not pay for a traditional TV service. Experian also found that households who only watch streaming video on mobile devices are 1.5 times more likely to cut the cord, while those who watch streaming video on TV are 3.2 times more likely to cut the cord.
The above is taken from Cir.ca’s summary which also contains some other data points you might find of interest. I think it’s pretty clear that whatever is going on it’s happening at an increasingly rapid pace. It’s pretty apparent that as mobile devices – phones and tablets – become more able to handle high quality video streams the tether to the TV screen gets weaker. The rapid growth of Roku devices along with Chromecasts, Amazon’s Fire TV, Apple TV, and other over-the-top devices, along with “smart” tv’s, has meant that well over half the homes have some way to access “television” on their TV screen without using a traditional cable service. To me, that doesn’t bode well for the cable guys.
On the other hand, I’m guessing that most homes get their broadband internet service from the same people from whom they get their video service. We’re already seeing Comcast and other providers marketing high-speed internet with a small dose of video, a very different approach. Is the door open to others jumping in as Google has with Google Fiber? Where are the WiMax folks? Stay tuned – this isn’t over. I am not sure where the trend line flattens out and the cord-cutting phenomenon stops, but we’re not there yet as this data shows. What are your thoughts?
Consult Keith 