More Consumers Cutting or Thinning the Cable TV Cord

As we move through January and consumers focus on their New Year’s Resolutions, some will be taking a closer look at their household budgets. One line item certain to draw scrutiny is the cable or satellite TV bill. With so many other video entertainment options now available, consumers  youngfemaletvviewerare increasingly tempted to cut or thin the cord according to Digitalsmiths. This trend has implications for media companies and marketers.

Last year, the number of consumers who decreased or removed pay TV services increased from 13.4% in the first quarter to 16.9% in the third quarter. In the next 6 months, 34% of surveyed consumers said they would ‘maybe’ make changes to their pay TV services while 6.9% definitely plan to make changes and 2.9% plan to cut the service completely.

With 76% of subscribers paying over $75 a month for TV, it’s easy to see why over 70% say their chief complaint is cost.  A bigger problem for cable and satellite operators may be the consumers who are enhancing their viewing experiences by subscribing to other services or paying for video-​on-​demand programming. About 3% of households purchase 3 or more video-​on-​demand programs on a monthly basis. The popularity of Amazon’s prime service means that 8.9% of households now rent programming from this provider and 12.9% access free movies this way. In addition, 41.7% subscribe to Netflix.

For these consumers, convenience (60.1%), lower cost (48.3%), and show binging (42.6%) are big motivators. Convenience is important for sports fans. Because Over the Top  (OTT) access allows for mobile device viewing, consumers are watching what they want, when they want. 6.7% view live sporting events on tablets and 10.8% do so on their smartphones.

Pay TV operators are busy trying to enhance their systems to attract the generation ‘nevers’ – those who have never had a traditional pay TV subscription. These enhancements mean increasing their presence on social media to allow for discovery and improved search tools to help viewers find something to watch.

Media companies that succeed in attracting younger subscribers will have an easier time selling advertising to marketers who want to reach these consumers. What's your take on the situation? Is it to late to win back these consumers? Should media companies be rolling out a different type of ad format, such as apps, to better compete?

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.