Cord Cutting's Not-So Imaginary Any More: One Fifth Of Consumers Could Ditch Cable TV Next Year

Broadband

from the not-just-a-river-in-Egypt dept

While cable industry executives are still intent on claiming cord cutting’s either a mass hallucination or a fad, data suggests that ditching traditional TV for Internet video is gaining steam. A new study by PwC (PricewaterhouseCoopers) indicates that while traditional TV customers get 194 channels, they only watch, on average, about 17 of them. And while the study found that 79% of US consumers subscribe to some form of traditional pay-TV, 23% said they engaged in “cord-trimming” in the past year (reducing their overall package where they could), and 16% said they had unsubscribed from pay-TV services in the past year.

And there’s no mystery as to why this is happening. The full PwC study notes that cost (pdf) is the primary reason:

“Cost is an unavoidable aspect of consumer decision making?and the most important factor for cord-cutters. 57% of cord-cutters say they choose not to subscribe to cable because ?the monthly costs are just too high.”

Behind cost, also unsurprisingly, comes annoyance at the lack of control and flexibility in most cable packages:

“When asked what would entice consumers to re-subscribe to pay-TV, 56% identified ?being able to customize my package to exactly the channels that I want? as their number one motivator. And this sentiment is not exclusive to cord-cutters: 45% of current pay-TV subscribers said they most preferred an ?a la carte? package of channels that they could customize themselves.”

And that’s nothing new. Consumers have been begging for more flexible and cheaper programming options for fifteen years or more. Historically, the cable industry’s response has been that a la carte TV is impractical because it would demolish the existing pricing model, cause higher rates, and force less-watched channels off the air. But all of that’s happening anyway. And while a la carte TV was portrayed as a bogeyman, the industry was busy fighting off any pricing innovation of any kind. In fact, it has taken fifteen years of sustained bitching just to get a basic channel bundle without ESPN in it.

The end result is obvious. The PwC study notes that last year, 91% of consumers said they could see themselves subscribing to cable in the following year. This year, that figure dropped to 79% as a growing number of Internet alternatives began to emerge. In other words, the firm believes that one-fifth of consumers could ditch their cable subscription in the next year now that they have some alternatives to switch to. A similar study last week by eMarketer makes the same point with a slightly longer timeline, claiming that one in five homes will no longer subscribe to traditional television by 2018:

“In 2015, there will be 4.9 million US households that once paid for TV services but no longer do, a jump of 10.9% over last year. And that growth will accelerate in the coming years, with the number of cord-cutting households jumping another 12.5% in 2016. In fact, by the end of next year, the number of US households subscribing to cable and satellite will drop below 100 million.”

While the slow and steady pace of the shift is what fed industry denial, it also means there’s still plenty of time to do something before Internet video starts really demolishing legacy TV revenues. And it’s not rocket science: offer just a little more flexibility at a notably better price point (and maybe try sucking at customer service just a little bit less). Instead, most cable and broadcast execs simply mumble something about the great value cable provides while keeping their heads buried deep in the sand, confident they can lean on broadband usage caps to counter any lost TV revenues down the road.

Filed Under: broadband, cable, cord cutting, internet, tv