Some research studies have indicated that as more content becomes available online and offline, consumers engage with more entertainment. But that may not always be the case. A new study by The Diffusion Group indicates a negative correlation between the introduction of new tech toys and services and consumer willingness to pay for TV.
The Diffusion Group research points to one demographic group, purchasers of iPads, that shows a higher rate of pay TV cancellation or downgrades. Specifically, 12.9% of iPad owners say they are highly likely to cancel pay TV while about 33% of this group overall are considering making changes to what they pay for on TV.
New technology is not the only factor contributing to the declining demand for cable TV. A recent Harris Interactive poll found that 22% of consumers had either cut back or completely canceled cable TV services in the past 6 months. By age group, consumers mostly likely to do so are:
- Ages 34–45 28%
- Ages 46–64 23%
- Ages 18–33 22%
During the Great Recession, cable TV operators fared better than other media companies as marketers cut advertising. However, the future may be challenging for this media format. Detailed data from SNL Kagan, provided by the Wall Street Journal, shows that the largest U.S. markets had a gain of 125,000 subscribers earlier this year. But other markets did not fare as well. Places like Naples/Ft. Meyers, FL, Cedar Rapids-Waterloo-Dubuque, IA, Fairbanks, AK, St. Joseph, MO, Lima, OH and others registered at least a 1% drop in subscribership.
It’s too soon to know if the drop in paying for cable TV services will continue. If it does, marketers may begin to reconsider the allocation of media budgets spent on this ad format.[Sources: Winslow, George. TDG survey finds nearly 13% ‘highly likely’ to cancel service. Broadcastingcable.com. 11 Nov. 2010. Web. 24 Nov. 2010; Spangler, Todd. 22% of Americans Cancel or Cut Back. Multichannel.cm. 11 Nov. 2010. Web. 24 Nov. 2010; Schechner, Sam. Cord-Cutting Avoids Biggest Cities. WallStreetJournal.com. ]