What’s up with Cord Cutters?

Fatty_watching_himself_on_TVMorgan Stanley just released their fourth annual survey on the media, cable and satellite business. In thus survey they talked to 2,501 adults nationwide. In this survey they looked in detail about how people use media – what they watch and how they watch it.

The most interesting statistic to come out of the survey is that for the fourth straight year a significant percentage of people said they are going to cut the cord in the coming year. 10% of respondents said that they were definitely going to cut the cord and another 11% said that they would probably be cutting the cord. If these percentages were true, and 21% of the country was going to be cutting the cord, the cable industry would be in a major tailspin. This survey ought to be major headlines on every business page, right?

But it’s not, and that’s because there have been similar responses to this survey the last few years. In last year’s survey those same two percentages added to 17%. The prior year they added to 15%. But the cable companies did not experience cord cutting to anywhere even remotely close to those percentages in the last two years. Certainly there is cord cutting going on and the industry has certainly lost at least several million people due to this new trend.

But what this survey tells us is that people want to cut the cord. One full fifth of households with cable are clearly unhappy with the big bundles of channels, and eventually that is going to come home to roost with the cable industry. The other statistic that bears this out is that only 50% of the respondents in the survey actually like the big package bundles, a number that is dropping every year.

We’ve seen the same thing before with home telephones. For years people talked about getting rid of their home phone and yet it took a number of years for many people to do so. But eventually people will act on how they feel and the cable industry has a big problem brewing.

As you might expect, there is an age component to potential cord cutters. 30% of the people who said they would or might cut the cord are in the 18 – 29 year-old age bracket. And that percentage decreases as the age increases.

I find these results interesting because almost everybody I talk to is unhappy with what they pay for cable TV. Maybe that’s because most of those people I talk to are in the industry. But I know many cord cutters and I know that this is really happening. I would be a cord cutter myself, but Comcast made me take basic TV (20 or so channels) if I wanted to buy a cable modem faster than 12 Mbps. So I am officially a TV subscriber, even though I don’t own a TV and the cable box they gave me is gathering dust in the closet. There can’t be a lot of people with my same story and who are being coerced into buying cable and who then don’t even watch it. But this does show that perhaps the reported subscribers of the big cable companies are a bit inflated due to these kinds of policies.

The survey also showed that the OTT programmers are doing quite well. 30% of the households in the survey watch NetFlix, up over 5% from the last survey. 18% watch AmazonPrime, up 10% from the last survey. And while the free Hulu service lost about a percentage of viewers, its for-pay service Hulu Plus is up almost 5%.

I titled this blog ‘What’s up with Cord Cutters’, but perhaps a better title would be ‘What’s up with the Almost-Cord Cutters’? There are apparently a whole lot of people who are thinking of cutting the cord. Perhaps one year soon a large percentage of the number of people who say they are going to cut the cord will actually do it. And then the wheels start coming off the cable model.

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