Cord cutters have proven a favorite subject of analysis for throngs of reports over the last few years. What are the demographics? Is cost the only motivating factor for dropping traditional pay TV services? What do pay TV operators need to do in order to maintain, or even add, subscribers?
If you’re involved in the cable TV industry in any way, you’ve probably read scores of articles referencing cord-cutting research, and here’s another one – but with an interesting twist. Many reports rely on self-reported survey data, but a new one from comScore uses actual behavioral data to reach its conclusions.
comScore recently analyzed the over-the-top (OTT) viewing habits of households in its “Total Home” behavioral measurement panel – those which previously subscribed to cable or satellite, but no longer do so. The data was based on measuring March 2017 behavioral OTT viewing data for the approximately 870 cord-cutting homes in comScore’s 12,500+ household panel. It was then weighted and projected to the represent the proportion of WiFi households in the United States that have dropped pay TV service. The study also looked at data from more than 4,700 homes that subscribe to an OTT service as well as pay TV.
According to the research, the average OTT viewing home in the United States spends 49 hours a month viewing OTT content. However, cord-cutter homes consume 79 hours of OTT content a month (2.5 hours per day) – about 60 percent more than the average. At first blush, that seems a lot, but comScore says the average U.S. household watched 225 hours of linear TV content in March. So the company concludes cord-cutting households seem to have less of an overall appetite for TV content, which could mean that’s part of the reason they snubbed pay TV services in the first place.
In terms of economic demographics, cord cutters are more likely to have annual incomes of $75K or less, and the report says the lower the income, the more likely they are to drop a pay TV service. Homes with annual incomes of $60K to $75K are reportedly 8 percent more likely to be cord cutters compared to the average OTT viewing WiFi-enabled home. Homes with income between $40K and $60K are 14 percent more likely, according to the comScore data, while those homes with less than $40K annual income are 20 percent more likely. The homes least likely to cut the cord are said to be homes with incomes between $75K and $150K.
comScore’s data is interesting to size up against the very poor showing most traditional pay TV operators had when it came to video subscriber losses in Q1 2017. Comcast was the only major provider that came out with video adds, and analysts have leaned toward suggesting that’s because the operator has mainly avoided relying too hard on the skinny bundle to maintain subs.
The Diffusion Group suggests Comcast made a smart move by stepping up its video offerings through its X1 platform rather than focusing on hitting a rock-bottom price to save subscribers without understanding the long-term consequences of such a tactic.
“TDG observed long ago that incumbents were going to have to make a choice: either resign themselves to being a ‘dumb-pipe’ provider, or invest in using IP, change the TV experience, and become the go-to source for all things video,” TDG Co-Founder and Principal Michael Greeson says. “Comcast tuned into the latter, investing in the hardware and software required to bring the power of IP to the legacy TV experience, and the company is now gaining video subscribers when others are reporting losses.”