Cord-cutting

In broadcast television, cord-cutting refers to the pattern of viewers, referred to as cord cutters, cancelling their subscriptions to multichannel subscription television services available over cable, dropping pay television channels or reducing the number of hours of subscription TV viewed in response to competition from rival media available over the Internet such as Amazon Prime, Crunchyroll, Hulu, Netflix and YouTube Premium. This Internet content is either free or significantly cheaper than the same content provided via cable.

As a market trend, a growing number of "cord cutters" do not pay for subscription television in favour of some combination of broadband Internet and IPTV, digital video recorders, digital terrestrial television and/or free-to-air satellite television broadcasts. A related group, the cord-nevers, have never used commercial cable for television service, relying on internet sources from the start. A number of purely internet television services, part of the wider IPTV concept, have emerged to cater to these groups.

Parks Associates estimated that in 2008, about 0.9 million American households relied entirely on the Internet for television viewing; by 2017, this figure had increased to 22.2 million. Leichtman Research Group found that six percent of Americans watched at least one show online each week in 2008, a figure that grew to eight percent in 2009. The number of Americans subscribing to cable service increased two percent in 2008, but the growth had slowed. Sanford C. Bernstein & Co. found that in the fourth quarter of 2008, the increase was seven-tenths of one percent, or 220,000 homes, the lowest ever recorded. A Centris report showed that 8% of Americans expected to cancel their pay television service by the third quarter of 2009. About half of Americans tried to get a better deal from a provider other than the one they were subscribed to. Amazon Video, Hulu, iTunes, Netflix, Sling TV and YouTube, made cancelling service possible for those who would be unable to see their favorite programs over the air. Sports programming was a big reason for not cancelling pay television service, although online options existed for many events. Another problem was the inability to watch many programs live, or at least soon enough in the case of a television series.

2010 was the first year that pay television saw quarterly subscriber declines. In the second quarter of 2012, Sanford Bernstein determined that losses took place in five quarters. Leichtman found that the decrease in pay subscriptions was not happening in large numbers. One reason was that some sports events, as well as other types of television (such as series airing on cable-originated networks), could not be seen online. Sanford Bernstein said the number of pay television subscribers increased by 677,000 during the first quarter of 2010, and a poll conducted by The New York Times and CBS News showed that 88% of people surveyed had such a service, and only 15% had considered going exclusively to web services. People under the age of 45, the survey said, were four times more likely to use the Internet only. To combat the trend, pay television providers were allowing people to stream television programs on desktop, laptop and tablet computers. Craig Moffett of Sanford C. Bernstein still stated that high prices and other methods would eventually drive customers away, calling cord cutting "perhaps the most overhyped and overanticipated phenomenon in tech history."

Comcast reported a loss of 275,000 subscribers in the third quarter of 2010, bringing the total for the calendar year to 625,000. The company said most of these losses were not from people leaving for another service. Moffett pointed out that cable companies needed to offer lower-cost packages, but a survey by Strategy Analytics revealed financial considerations were not the primary reason. People were not satisfied with what they could get, and online sources had a wider array of content. The survey showed that 13% of cable subscribers intended to cancel service in the next year. Slightly more than half were under the age of 40, and nearly all had a high school education. Two-thirds had or planned further schooling, and just over half earned at least $50,000 a year.

In second quarter 2011, Comcast lost 238,000 television customers, compared to 265,000 a year earlier, though the company was making up for these losses with increases in other services such as Internet. Moffett said the slowing rate indicated that online sources were not making people drop cable as quickly. On the other hand, Time Warner Cable and Charter Communications lost more customers in the quarter than in 2010. Time Warner Cable lost 130,000, while Dish Network lost 135,000; by comparison, DirecTV gained 26,000 subscribers, compared to 100,000 the previous year. Nielsen Media Research estimated that the number of households with at least one television set had decreased from 115.9 million to 114.7 million, while also estimating an increase in program viewing by computer, tablets or smartphones. Services such as U-verse were increasing their subscriber numbers by offering special features: U-verse's "My Multiview" option allowed people to watch four channels at once, while Cablevision's "iO TV Quick Views" allowed the display of up to nine channels at once.

This page was last edited on 4 July 2018, at 16:07 (UTC).
Reference: https://en.wikipedia.org/wiki/Cord_cutters under CC BY-SA license.

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