The Cable Industry Thinks Cord Cutting's A Fad That Will End Once Millennials Procreate

from the the-lies-we-tell-ourselves dept

One narrative that broadcast and cable industry execs use to comfort themselves late at night while sipping bourbon is that cord cutting is the realm of the foolish youngster, and that as these folks age they'll suddenly see the wisdom in paying an arm and a leg for traditional cable. Nielsen, the TV ratings company that goes out of its way to tell the cable industry what it wants to hear, has been pushing this narrative hard lately; arguing that as the 18-to-34 demographic begins having children, the idea of giving Comcast $150 a month for huge bundles of awful channels is going to suddenly, somehow become appealing:
"We think behaviors could change once the so-called millennials start having families,” said Glenn B. Enoch, senior vice president for audience insights at Nielsen. New parents’ desire for better programming for their children will help drive them to cable, media executives have predicted.
Nielsen's confidence appears based entirely on the fact that Millennials with kids are slightly more likely to subscribe to cable than their childless counterparts, for now:
About 80 percent of millennials with their own homes who have started families subscribe to cable, and an additional 14 percent get television with an antenna, according to Nielsen. Only 6 percent have just broadband connected to a television set. Among childless millennials who live in their own homes, about 75 percent subscribe to cable television, while 13 percent live in so-called broadband-only homes.
Of course, that doesn't mean much. When it comes to the ratings hit being seen by traditional cable channels, children's programming has led the charge, with parents being much happier with the flexibility of time-shifted viewing experiences like Netflix. Meanwhile, 2015 was really only the first year that skinny bundle streaming video services started to take off (Sling TV, Sony's Playstation Vue), and the rise of affordable streaming options is only going to improve as broadcasters release their iron-like grip on licensing rights.

It's also worth reminding readers that Nielsen is the same company that just a few years ago declared cord cutting to be "purely fiction," only recently realizing that maybe it would be a good idea to start tracking these users' viewing behaviors.

One major thing Nielsen's ignoring? The rise of the "cord never," or the customer who doesn't have cable and has absolutely no interest in getting it. A new study by Forrester Research makes the exact opposite claim Nielsen is trying to sell, predicting that by 2025, 50% of consumers under 35 won't pay for traditional cable. The survey of 32,000 U.S. adults found that 76% subscribe to cable. Of the 24% who don't, 6% are cord cutters. 18% however are cord nevers, which the firm declares "the next stage of evolution in TV viewing":
"Rather than inherit TV viewing expectations from a prior era and then consciously reject them, as cord cutters have done, these cord-never viewers have simply bypassed prior assumptions, exhibiting nearly the exact set of behaviors that cord cutters have pieced together for themselves over the past decade of viewing," wrote Forrester analyst James McQuivey."
In other words, there's a huge contingent of young consumers for whom "normal" is not paying an arm and a leg for cable. Why, exactly, would these users, used to the flexibility and lower costs of streaming video (or piracy, or YouTube "let's play" videos) suddenly, inexplicably decide that they want to throw money at a legacy cable industry that refuses to compete on price? Sure, older consumers are more likely to pay for cable now because that's all they know, but as streaming services get more established older audiences too are leaving the traditional cable wheelhouse.

So while it may upset the cable industry (and the folks that make their lives on the back of the cable industry) to hear it, no -- the trend of dropping ratings, dwindling subscriber losses and fierce new competition from Internet video is not something that's going to be magically fixed by waiting for Millennials to screw.

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The First Word

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  1. identicon
    Andrew D. Todd, 19 Oct 2015 @ 11:56am

    By Mail Order

    I recently bought three hundred and fifty movies on DVD's from Edward R. Hamilton, for about a hundred dollars, in sets of twenty-five and fifty movies. That is more movies than I can watch in the foreseeable future. At the most conservative computation, this purchase is at least ten times cheaper than anything the cable company is offering, or, alternatively, than the ISP bandwidth to support any streaming service.

    In respect to children's materials, I find, consulting Amazon, that you can get a "Sesame Street Learning 3-Pack (All-Star Alphabet / Learning About Numbers / Guess That Shape and Color)" DVD for $12-13, and obviously, that is going to go really a long way. You can get an assortment of other Sesame Street DVD' for about twenty dollars each.

    Old movies are not time-sensitive, nor is children's material in any form, and you can get them by mail-order at modest prices. You can be fairly sure that, say, Jule Andrews (Mary Poppins, Sound of Music, etc.(*)), is not going to become a porn star. Vide Miley Cyrus/Hannah Montana, no such assurance is possible for the young women presently performing in children's television. Once they get too old to pass for twelve, they will have to find new employment, perhaps not of the most dignified character.

    (*) Available in various DVD editions on Amazon for $8-$10.

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