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    Explainer

    Snip Snip: An Exploration of Cord-Cutting Consumers

    Abstract

    • Between 2016 and 2021, pay TV lost around 50 million adult viewers.
    • 63% of those who cut the cord did so because they considered cable to be too expensive. 
    • Cord-cutters are more likely to be younger and innovative.
    • By 2024, the number of cord-cutters and cord-nevers will reach 138.1 million, surpassing the 129.3 million expected pay-TV viewers.

    With many consumers choosing to cancel their cable subscriptions, it’s time to take a look at what drives this cord-cutting behavior.

    The world of television has changed a lot over the last few years, with new technology and platforms allowing TV viewers to watch content in ways outside of the traditional, linear forms of TV. As a result, there has been a rise in viewers who have been cutting-the-cord on their cable subscriptions (in other words, canceling cable in favor of other channels such as streaming). This audience group is aptly called “cord-cutters.”

    eMarketer estimates that between 2016 and 2021, pay TV lost more than 25.5 million households (equal to around 50 million adult viewers). And it is unlikely that some (if any) of those cord-cutters will return to cable at some point in the future—one study found that only 6% of those who cut-the-cord and moved to streaming only services regretted that decision.

    There are a number of consumer groups that fall under the cord-cutting umbrella:

    • Classic Cord-Cutters: This is the group that one might typically think of when describing the mass exodus of cable subscribers. The term “cord-cutters” fits any TV watcher who makes the decision to cancel their linear TV watching subscriptions (cable, satellite, or antenna) in favor of content served through streaming and Connected TV
    • Cord-Nevers: A group of consumers who never had a cable subscription in the first place, and don’t plan to get one in the future. This audience is typically younger, and find that once they leave their parents’ homes they aren’t interested in going through the process of getting a cable subscription set up because streaming services fill all of their TV and movie watching needs. 
    • Cord Trimmers: Some consumers will choose to cut back to a lower priced pay TV subscription in order to save money. This is because they might enjoy some channels on traditional TV, but aren’t using enough of them to justify a full linear package. Many of these cord-trimming consumers also make this change to make room for streaming subscriptions within their budgets.

    The Demographics of Cord-cutters

    So who are cord-cutters? While the large influx of cord cutters over the last few years has made their differences from other Americans harder to point out, there are a few factors that set them apart. A study from Civic Science explored some of the key demographics of this group of consumers. They found that cord cutters are:

    • More likely to be under 55 (and twice as likely to be under 34 years old)
    • More likely to have a household income of less than $50k
    • And less likely to live in the suburbs

    In addition to those demographics, the study found that cord-cutters also have a few character traits in common. This audience group is considered to be slightly more likely to be open to new experiences, and could be described as innovative and curious. Cord-cutters also are more likely to exhibit temperamental and emotional traits.

    Reasons for Cord-cutting Behaviors 

    There are a number of reasons that so many consumers have been cutting-the-cord on cable, starting with price. Civic Science found that 63% of cord-cutters did so because they considered cable to be too expensive. This trend is likely to continue as many Americans become even more price-conscious due to rising inflation and a potential recession on the horizon.

    American consumers also decided to join the cord-cutting wagon for a few other reasons. Thirty percent of respondents said that they prefer streaming content over cable, and some cord-cutters were dissatisfied with their cable providers (26% of consumers who cut the cord did so because of poor customer service). The survey respondents also included that they had stopped watching live TV (21%), had limited or no access to cable (9%), or found that there were fewer ads on streaming services(24%).

    The Future of Cord-Cutting

    And as we look to the future, it’s clear that linear will continue to experience this kind of decline. At the end of next year, less than half of US households are expected to have a traditional pay TV subscription. By 2024, eMarketer estimates that the number of cord-cutters and cord-nevers will reach 138.1 million. This will ultimately pass the number of pay TV viewers, which is expected to fall to 129.3 million by then, as seen in the below chart.

    What the Industry Is Saying

    “Pay TV viewership peaked in 2013, and since then, consumers have flocked to connected TVs (CTVs) and over-the-top services for programming.”

    eMarketer

    “The primary reason for cutting the cord in the United States was the cost – cable was too expensive for nearly one in three respondents to a 2022 survey. Second most common reason was that people did not use cable TV enough that it would justify the cost.”

    Statista

    “Consumers driving the cord-cutting trend align well with the shifting demographics across America. Popularity is growing among young and diverse consumers and those living in cities and rural communities alike.”

    Civic Science

    “The streaming landscape is changing, as streamers strike deals for live sports programming and introduce ad-supported tiers of membership. These factors create an increasingly enticing environment for disgruntled pay TV households to finally cut the cord.”

    eMarketer

    Conclusion

    Cord-cutting behavior over the last few years has only continued to grow—to the point that we can expect the recent record high time spent watching streaming over cable to become more of the norm. And considering the number one reason cable subscribers cut-the-cord has to do with how expensive these services can be, the increasingly uncertain nature of the economy in recent months is likely to drive more TV watchers to join the mass migration to streaming. Advertisers looking to get their campaign messages in front of cord cutters on TV will have to look to Connected TV (if they haven’t already) in order to reach them.

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