US Report Claims Cord cutting up 44% in past three years

written by: Richard Kastelein

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1coolpic2A recent report from Experian has concluded that some 7.6 million U.S. households, or 6.5 percent of the total, cancelled their pay TV service from cable or satellite providers, and that as many as a third of those have opted instead for Internet TV "over-the-top" (OTT) services from providers such as Apple TV and Roku.

From the report:

Cord-cutting on the rise - Netflix, Hulu users biggest cord-cutters

An estimated 6.5% of U.S. households (7.6 million homes) today are considered “cord-cutters,” meaning they have high speed Internet but no cable or satellite television service. That’s up from 4.5% of households (5.1 million homes) in 2010, a relative increase of 44%. While the term cord-cutter implies that a household had a cable or satellite TV subscription that was cancelled, young adults starting out on their own for the first time may never pay for TV service. In fact, 12.4% of households inhabited by an adult under the age of 35 (almost twice the national average) are cord-cutters. Throw either a Netflix of Hulu account into the mix and the share of young adult households that don’t pay for TV jumps to 24.3%.

"Cord-cutting used to be an urban myth. It isn't anymore. No, the numbers aren't huge, but they are statistically significant." CRAIG MOFFETT, MOFFETT RESEARCH
Smartphone and digital tablet ownership—especially iPhones and iPads—also noticeably increases the odds that a household is a cord-cutter. Specifically, households where at least one resident owns a smartphone are 20% more likely to be cord-cutters and households where someone owns a tablet are 36% more likely. Compare those baselines to the fact that iPhone-owning households are 33% more likely to be cord-cutters and households with an iPad are 65% more likely.

 

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Not everyone agrees with the numbers of course, Fierce Enterprise published a critique from veteran entertainment and broadband media analyst Bruce Leichtman (former director of marketing for Continental Cablevision), principal with Leichtman Research Group which claims the numbers are not correct:

"This massive cord-cutting never really happened," states Leichtman in an interview with Fierce. "Because it never happened to the degree that many predicted-slash-hoped for, we have thus redefined what cord-cutting is."

"What cord-cutting was supposed to be five years ago," Leichtman continues, "was somebody who disconnected their pay TV service because of what's available online. It never really happened to a large degree." He then pointed to a survey of Canadian households by Convergence Consulting earlier this month, which reached the same implication about the data it collected.

Timothy Stenovic from Huffington Post disagrees:

And who can blame them? TV is pricey. The average cable TV bill, not including fees, promotions or taxes, has increased by a whopping 97 percent over the past 14 years, according to the media research firm SNL Kagan. That bill could reach a whopping$200 per month by 2020, one study found.

That could spell trouble for cable companies like Comcast and Charter down the line.

"The young millennials who are just getting started on their own may never pay for television," said John Fetto, a senior analyst at Experian Marketing Services. "Pay TV is definitely declining."
 

About the Author

Richard Kastelein
Founder of The Hackfest, publisher of TV App Market and global expert on Media & TV innovation, Kastelein is an award winning publisher and futurist. He has guest lectured at MIT Media Lab, University of Cologne, sat on media convergence panel at 2nd EU Digital Assembly in Brussels, and worked with broadcasters such as the BBC, NPO, RTL (DE and NL), Eurosport, NBCU, C4, ITV, Seven Network and others on media convergence strategy - Social TV, OTT, DLNA and 2nd Screen etc.

He is a Fellow of the UK Royal Society of Arts (RSA) and UK Royal Television Society (RTS) member.

Kastelein has spoken (& speaking) on the future of media & TV in Amsterdam, Belfast, Berlin, Brussels, Brighton, Copenhagen, Cannes, Cologne, Curacao, Frankfurt, Hollywood, Hilversum, Geneva, Groningen (TEDx), Kuala Lumpur, London, Las Vegas, Leipzig, Madrid, Melbourne, NYC, Rio, Sheffield, San Francisco, San Jose, Sydney, Tallinn, Vienna, Zurich...

He's been on advisory boards of TEDx Istanbul, SMWF UK, Apps World, and judged & AIB awards, Social TV Awards Hollywood, TV Connect & IPTV Awards.

A versatilist & autodidact, his leadership ability, divergent and synthetic thinking skills evolved from sailing the world 24000 miles+ offshore in his 20′s on sailboats under 12m.

He spent 10 years in the Caribbean media & boating industry as a professional sailor before returning to Europe, to Holland.

A Creative Technologist and Canadian (Dutch/Irish/English/Metis) his career began in the Canadian Native Press and is now a columnist for The Association for International Broadcasting and writes for Wired, The Guardian & Virgin. His writings have been translated into Polish, German and French. 

One of Kastelein's TV formats was optioned by Sony Pictures Television in 2012. 

Currently involved in a number of startups including publishing TV App Market online, The Hackfest and Tripsearch TV. As CSO for Worldticketshop he helped build a $100m company.

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