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Cable Technology Feature Article

September 26, 2013

Video Cord Cutting Appetite Keeps Growing, Little by Little

By Gary Kim, Contributing Editor

It might be a slow drip, drip, drip sort of phenomenon, but video “cord cutting” is increasing, according to an analysis by Frank Magid Associates.

Magid says 2.7 percent of subscription TV customers say they are “thinking” about cutting the cord in the next year. That’s up from 2.2 percent a year ago, and 1.9 percent in 2011.

Skeptics will say those are relatively small percentages, and that more people “thinking” about cord cutting is nearly always less than the number of people who will actually do so.

Still, subscription TV services have one problem common to all recurring subscription services. Buyers get monthly reminders of how much they are paying, keeping the issue top of mind, at least once a month, for customers who have at least some issues with the value and price relationship. 

Image via Shutterstock

More than half of the might-be-cutters say they would do it because they get enough video to keep them happy via outlets like Netflix, Hulu and Apple’s (News - Alert) iTunes, Magid says.

But more than half also say they would do so for economic reasons. Either way, there is a growing sense that the value-price relationship is growing unattractive, for more people.

As you might guess, the study suggests 4.4 percent of 18-to-34-year-olds are thinking about cutting the cord, a higher than average finding.

Sports enthusiasts, as you also might guess, are less likely to say they’ would consider abandoning their video subscription.

Other studies also suggest who might guess is the case, namely that users who now have learned to rely on Internet video are more likely to say they would consider cord cutting.

According to a Diffusion Group study, 8.8 percent of adult broadband users with an Internet-connected TV and traditional video service report being highly inclined to cut the cord in the next six months. That compares to 3.5 percent of adult broadband users with video service who don’t use a connected TV.

The point is that important consumer behaviors change when a reasonable substitute product is available. For a growing number of viewers, those reasonable substitutes, if not available today, might get a favorable reception when those options do become available, as people increasingly are used to using the Internet as a delivery mechanism.

Edited by Alisen Downey

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