Yet another report about cord cutting, this one saying cord-cutting households are on the rise in the U.S., especially among video streamers.
The report from Experian, a marketing firm known for consumer insights, targeting and data, and suggests cord cutting is growing slowly, but inexorably. It said about 7.6 million (6.5%) of U.S. households counted themselves as cord cutters in 2013, compared to 5.1 million households (4.5%) in 2010.
The research also found that – not surprisingly – the percentage of younger consumer households, aged 18-34 who were not subscribing to traditional pay-TV sources had grown from 7.9% to 12.4%, a 57% increase. Experian didn’t break out cord cutters and cord nevers in that number, but the trend is stark.
Among households that have a Netflix or Hulu account, non-pay-TV subscriber percentages jump to 18.1%, up from 12.7% in 2010.
Want a really scary number? Try this: households inhabited by an adult under the age of 35 that subscribe to a streaming service go without pay-TV subscriptions at nearly 4X the national average, a whopping 24.3%.
The study also posits that device owners, especially iPad owners are far more likely to cut the cord than non-device owners.
IPad owners, the survey found, are 65% more likely to be cord cutters, other tablet owners (36%), iPhone owners (33%) and other smartphones owners (20%) all are at risk, Experian found.
That predilection for devices is a good example of why operators need to continue to aggressively develop their TV Everywhere efforts.
The bottom line? If a service provider can’t deliver content over-the-top to those devices, odds are they’re going to continue to lose subscribers.
Experian said that “while the act of watching streaming or downloaded video on any device is connected to higher rates of cord-cutting, the act of watching streaming or downloaded video on a television is the most strongly correlated.”
In other words, while adults who watch video on either a tablet or smartphone are 1.5 times more likely than average to be cord-cutters, those who watch streaming video on a television are 3.2 times more likely to be cable-cutters.
And, said Experian, “those who say that they use their television primarily for watching streaming or downloaded video are 5.7 times more likely to be cord-cutters.”
Experian said being able to stream directly to a TV “appears to be the tipping point” for cord cutting, and posits that as devices like Roku, Apple TV, Amazon’s FireTV and Google’s Chromecast become more popular the cord cutting phenomenon will accelerate.
Experian’s report said about one-third of U.S. households currently have an Internet-connected TV (34%). About 41% use Apple TV and 35% use Roku, the company said, noting that it had no available data on Chromecast. The study also didn’t consider the recently released FireTV.
Obviously, pay-TV operators are concerned about their subscriber losses, but those losses have been more than offset by gains in broadband subscribers, a product that actually has higher margins than their TV business.
The 13 biggest MSOs in the U.S. lost just more than 105,000 net video subs in 2013, the first year the industry showed a full-year loss. Most of those losses came from cable operators who lost 1.74 million pay-TV customers.
But the industry also gained 2.6 million high-speed Internet connections. Those connections may herald the TV business model of the future.
Experian used an interesting mix of data for it report, drawing from the Summer 2013 Simmons Connect study, a survey of 24,219 US adults. Simmons Connect links in-depth consumer lifestyles, attitudes, brand preferences and more to their cross-platform media use covering 11 platforms, including smartphones, digital tablets and home computers. The report also sources data from Hitwise, the world’s largest sample of online consumer behavior.
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Posted in Online Video Trends, TV Everywhere
- See more at: http://www.videomind.com/blog/experian-cord-cutting-report-shows-why-operators-need-ott-strategy-now#sthash.qpQL8lP7.dpuf
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