Cord Cutting – It’s Not As Bad As You Might Think

Cord Cutting:

This is the “dooms day” term haunting the TV industry and more specifically the Television Advertising industry. It is used to describe the act of households abandoning traditional cable & paid TV service for various streaming and digital content providers. Simply Google the term “cord cutting” and you will find pages and pages of articles on the subject. Read deeper into those pages, past the editor’s click bait headlines, and you will see the sky isn’t falling after all!

 

I read an ADWEEK article this week by Patrick Coffee titled “With So Many Americans Dropping cable, Will Cord Cutting Doom TV as We Know It?. Through various interviews that include representatives from research groups, advertising agencies and industry strategists the TV picture that is brought into focus isn’t gloom and doom after all. It’s actually the opposite. Yes each year shows a percentage of people becoming “non-subs” or non-subscribers (households canceling services). But guess what?! That percentage hovers around 2% and has for the past decade! The market shows a pattern of subscribe – un–subscribe.

 

In the below excerpt from Coffee’s article experts discuss how this isn’t really an either/or situation.

 

“For millions of Americans, “TV” increasingly can mean both cable and over-the-top services. A survey conducted by the blog Cut Cable Today found that more than two-thirds of Netflix‘s 43 million U.S. customers still have cable service as well.

Researchers and agency strategists alike back up this larger point. “The term cord cutting is an oversimplification of a very complicated set of behaviors,” said Glenn Enoch, Nielsen’s SVP of audience insights. An April Nielsen report found that consumers are more likely to drop subscription services like Netflix than cable, and, as Enoch noted, “There are homes adding cable every day.” Droga5 head of communications strategy Colleen Leddy added, “What people are missing is that consumers are still watching traditional TV in addition to cord cutting,” and the opt-out group remains “smaller than headlines would suggest.”

 

In another article on the same topic, Sahil Patel of DIGIDAY.com explains in 5 charts the shape “new TV” is starting to take, it is one that looks a lot like “old TV” only from a different means of delivery.  My favorite image from Patel’s “How Digital and TV Are Converging, In 5 Charts is below:

 

“That said, the sky isn’t falling.

Only 22 percent of current pay-TV subscribers also paid for a streaming service like Netflix, Amazon or Hulu in the first half of 2015, according to Millward Brown Digital.

cordcuttingpic

Source: Millward Brown Digital

 

For what it’s worth, my take away is this, TV is TV. It’s content and will always be content so for now and in the future beyond TV will always look like TV

 

You can read the full DIGIDAY.com article here and Patrick Coffee’s ADWEEK article here.

– AN

 

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