Deloitte: 1 Out of 5 Have (or Will) Cut The TV Cord
9% Say They Already Have, 11% Say They Will Soon
The debate over TV cord cutting clearly isn't going away, with how severe of a trend it is depending entirely on who you ask. Folks in the cable industry continue to insist it's an irrelevant and tiny trend
, while those covering streaming video sectors noting that endless price hikes and Internet video are setting the stage for a complete revolution in the way television is viewed. 2012's first debate topic comes courtesy of a new Deloitte State of the Media Democracy Survey
According to Deloitte, one in five Americans say they've either cut the TV cord, or plan to do so soon. More specifically, the study found that 9 percent of respondents recently say the cut the cord, and 11 percent say they'll do so soon. Not surprisingly the report notes that video streaming is exploding, with the number of Americans saying they've streamed a movie jumping from 28 percent in 2009 to 42 percent today.
The results claiming that so many customers are eliminating pay TV doesn't square with industry statistics that show cable operators continue to bleed basic cable subscribers -- but it's usually to a telcoTV or satellite alternative. Overall traditional pay TV growth was simply flat last year -- with most TV customers simply switching between cable, telco TV or satellite to grab the best overall deal.
We've fired Deloitte an e-mail asking what accounts for the difference but have yet to hear back. While still minuscule in the face of overall cable business, the trend toward online streaming is a significant one -- especially for a cable TV industry that continues to insist on bi-annual rate hikes for already pricey service. Even some of Wall Street's most bullish cable analysts argue that the price hikes simply can't continue
if the cable industry doesn't want a major backlash.
| |CptGeminiInside your computerPremiumReviews:
Corpus Christi, TX
Well.. while we arent cutting the cord any time soon since my mother is disabled and spends most of her time at home and I myself am unable to work due to getting chemo for my cancer.
I just wanted to add in as a final note that I love the picture on the main page for this article that made me laugh LOL
Re: Well.. The problem is all the cable and content companies don't want things cheaper than it is now. So even if we were all to switch to some form of IPTV it won't be cheaper like it should.
Re: Well.. Isn't HBO owned in part by Time-Warner, the cable conglomerate?
HBO, as any typical content provider, would rather deal exclusively with the cable giants while leaving the customers largely out of the loop. They have ~28 million subscribers, and while they might add a few million subscribers if they offered an internet-only plan at a reasonable cost, they would certainly lose part of this to current TV subscriber cancellations.
They opted to add HBO to Go and charge the TV providers more money to carry their content, most likely with the looming threat of dropping sister channels or other programming associated with their ownership. This way, they can get their money up front and let the TV provider justify any cost increase to their customer base.
So, everyone complains about how the evil cable company is raising the price of HBO by $3, but ultimately the total number of subscribers only decreases by a small percentage, and when one considers the current shape of the economy, the net loss to HBO is really not impacted at all by the price increase. Also, sometimes the cable company will absorb the increase in their cost as part of the regularly scheduled price hikes to consumers, making the HBO rate increase even more transparent to the uninformed.
One of the biggest obstacle preventing the internet from being the main source for all of our video content viewing is that the media corporations have been trying to find methods to ensure their survivability and to keep from having to properly compete. Now with business models employed by ABC/ESPN and HBO, they can offer their content over the internet while ensuring that they still enjoy the antiquated financial relationship with the TV providers.
It is easier to negotiate a contract for an increase from $200 million to $250 million when only dealing with a single partner. If an agreement is not reached, we've all seen the results. The content provider pulls their programming and flashes messages on the screen about how terrible your cable company is, and to try a competitor. Eventually the dispute is settled and the consumers are left to clean up the battlefield in the form of rate hikes.
If the content provider were dealing directly with the consumer and tried to raise the rates per subscriber from $20 to $25, a proper market would likely see a significant drop in their overall subscriptions, keeping things in check.
| |cdruGo ColtsPremium,MVM
Fort Wayne, IN
said by jmn1207:Partially correct... HBO is owned by Time Warner. However, Time Warner no longer owns Time Warner Cable. The latter was spun off in 2009 and uses the Time Warner and Road Runner names only under license. So you are right that HBO is owned by Time Warner, but not the cable conglomerate. Just the media conglomerate.
Isn't HBO owned in part by Time-Warner, the cable conglomerate?
Re: Well.. Ah, thanks for the clarification. It's difficult to casually keep up with this stuff.
| |baineschile2600 ways to livePremiumReviews:
Sterling Heights, MI
Interesting Trend I think that the people most affected by this will be the distributors, not the actually TV providers and ISPs. If this many people are 'cutting the cord' then where are their revenues going to come from?
Recently, I know that HBO cut their agreement with netflix. We will see how much of a squeeze is put on online distrubution when the actually TV production shows start not getting as much revenue.
Re: Interesting Trend Indeed this is something I have wondered about for some time.
TV is bad enough now with the current revenue model. If they make less money, we will see more reality shows and retreads.
Well, prices are going to go up..... If cableco's can't keep their revenues up. Networks don't give a damn how many eyeballs cable providers can deliver, their prices won't go down because a percentage of video subscribers leave.
Re: Well, prices are going to go up.....
said by JasonOD :This part of your statement is not correct. Both content owners and distributors care very much about eyeballs. That's how they gauge interest and sell advertisements. You are correct in that cost for content and distribution will continue to rise. Eventually a balance will be reached where something will bend, but until then the status quo will continue.
Networks don't give a damn how many eyeballs cable providers can deliver
| |MajestikWorld TravelerPremium
Ala carte They can raise it as much as they want. Stop paying for cable in the early 90s. And have only the basic that comes with my condo. Now that has been canceled because of the price increases. I think I only watched 2 hours of cable tv since October so I won't miss it.
I pay $120/month total for grandfathered unlimited iPad,grandfathered unlimited iPhone,and Cox HSI
Created my own personal ala carte programing with Netflix,Hulu,and Vudu. The free 30+ HD local HD channels and Sky TV from Europe on my slingboxes,books to read,streaming radio,audio books,podcast,etc. costing me only $15/mo. total.
Don't need to be home can be anywhere to watch.
Don't watch sports.
I am spoiled now.
Also being at work 8-12 hours a day/some weekends and out of the country since Thanksgiving I am not paying for tv I have to be home to watch.
The adventure continues...Sanctuary....
Making do with less It's a sign of the economy. People are making do with less. Cable TV is a luxury service. An over the air antenna will provide most of the programming that most people watch.
What About My Group? I never had cable, phone company TV or satellite service. How are those that refuse to pay included in these statistics?
| |espaethDigital PlumberPremium,MVMReviews:
Re: What About My Group?
said by NO to ESPN :I believe that means you fall into the "Angry Curmudgeon" category.
I never had cable, phone company TV or satellite service. How are those that refuse to pay included in these statistics?
According to the survey, it's important for that group to keep their time free so they can yell at people to get off their lawn.
Not very smart math... 20% is 1 of 5 (2 of 10, or how about 200,000 cut cord out of 1,000,000 viewers... that is still significant ad revenue... )
And reasoning is:
-content is redundant or uninformative (not only are attention spans shorter, I believe people are (surprisingly) smarter than they were 20 years ago and want substance, not stupidity, i.e. Gilligan...)
-cost; average HDTV plan is $75/month not including any PPV/onDemand.
-choice; services like Hulu, Netflix, Crackle, Amazon Prime, Zune, PSN, YouTube, ... allow for variety
-Quality; have you seen some of these infomercials? or reality shows? I mean, seriously!
(although there are households that have more than one STB, and people that really like TV...I know a few that have to sleep with it on...or I knew a few, there will remain a number that depend on the DVR, and entertainment needs...sports, news, sitcoms and special programs/serials (HBO, Showtime programming...)
But I doubt the TV industry doesn't admit that they already know this...like the housing industry loss, homes go, jobs go, viewers go (move on to cheaper alternatives). Slap an HDTV antenna, get a $40/month internet connection and $ave. Personally, I like not watching the same thing everyone else does.
| |NightfallMy Goal Is To Deny YoursPremium,MVMReviews:
Grand Rapids, MI
Just further proof that consumers want alternatives Consumers want to cut the cord, yet no one seems to do it. As has been pointed out in the article, those who do leave cable TV companies end up subscribing to satellite. The main reasons why pay TV isn't going away anytime soon has to do with lack of viable (legal) alternatives and exclusivity contracts when it comes to some programing (like sports).
Yes, Hulu and Netflix are alternatives, but they don't have everything that the consumers want. Consumers want to watch their live sports in 1080i, but there are no sports programming for free online unless you count crappy streaming sites that are just ugly. They want anything that comes on any channel at the push of a button and for lower cost. These things don't exist yet.
For those of us who are techie enough, and willing to go with torrents, there are options when it comes to TV shows, but you still have to have the equipment and knowledge to take advantage of them. Either a PC connected to your TV or a PS3 with PS3 Media Server running on a system where you are sharing out the video. These things are not easy for the consumer.
Until a viable alternative comes out that offers all the programming, at 1080i quality, thats easy for the common consumer to use, you won't see a mass exodus from pay television.
For the record, I have Comcast and won't be cutting the cord due to sports programming and the quality of the feed that I get. If I ever lost my job, my comcast cable TV would be the first thing that I would cut. Cable TV is a luxury for me.
My domain - Nightfall.net
Re: Just further proof that consumers want alternatives Local broadcast TV, hulu, Netflix, and other streaming services have [my estimate] 95+ percent of what most consumers have any interest in seeing, and it takes hardly any work to find that content--legitimately. The other 5 or less percent may not be available either for free or via streaming, but is that really worth worrying about? or worth paying $100 or more per month to get that "complete package"? I cut the cord years ago, and I've never felt that I was lacking in entertainment options--at a much lower cost.
"Sorry for not responding to your post, but either I haven't seen it yet, or what you said was so devoid of substance that I found it utterly uninteresting."
| |DonLibesPremium,ExMod 2001
Re: Just further proof that consumers want alternatives I agree with wastrel. Since I cut the cord four years ago, I get my occasional TV or movie fix from legitimate streaming services or my local public library. My teenager daughter has even less interest in traditional TV as she and her friends believe its all crap. Finally, something we agree on.
| |NightfallMy Goal Is To Deny YoursPremium,MVMReviews:
Grand Rapids, MI
| |said by mod_wastrel:Thank you for speaking for 95% of the people out there. Those things you mention doesn't cover 50% of what I watch nor others that I know. Its not worth "worrying" about, but if I have a good paying job and can afford a luxury, why not indulge it?
Local broadcast TV, hulu, Netflix, and other streaming services have [my estimate] 95+ percent of what most consumers have any interest in seeing, and it takes hardly any work to find that content--legitimately. The other 5 or less percent may not be available either for free or via streaming, but is that really worth worrying about? or worth paying $100 or more per month to get that "complete package"? I cut the cord years ago, and I've never felt that I was lacking in entertainment options--at a much lower cost.
My domain - Nightfall.net
Re: Just further proof that consumers want alternatives My pleasure! It's all part of being General. (Smoke 'em if you got 'em. )
I would if I was Single I'd cut the cord if I was single. But being married and having 5 kids it's just too difficult to go with other options. It's much easier to just subscribe to the complete channel lineup that DirecTV offers. It's easy for everyone to use and everyone can find something to watch.
Re: I would if I was Single Its just easier to let the Entertainment Industry continue to overcharge us with a crap product. Its just easier to not teach my kids the value of a dollar. Its just easier to watch TV rather than play a game with the kids or start a family project. Its just easier than doing THE RIGHT THING!
I know its not easy raising kids. Thats why I dont have any. Nobody wants your kids to do without. Shows and movies can be rented many different ways and viewed as needed. Its in my opinion that kids would rather play video games anyways. Which in many cases can and will be more constructive that just sitting there like a veggie.
I swear the things some of you post are really telling. Not just about you but of our culture. Its disgusting.
But on a high note. Im pleased to see more and more people cutting the cord or at least cutting back on the packages they subscribe to. There has been a trend for a long time and its picking up steam. Sure many have just cut the cable for satellite instead but many satellite subscribers have also cancelled. They find alternatives and adjust.
The Big picture is as more and more people cut, the industry will be forced to make drastic changes. They are just going to have to live with trying to better their product for less money like everyone else and if they dont they just cease to exist. Other options will take their place and we will be better off. This is going to happen. The question is when. So I ask you thegeek. Because its the ones left like you who are afraid to do anything that might be inconvenient that are holding this process up. WHEN ARE YOU GOING TO MAN UP PEOPLE!!!!!! ----Its an expression. Ladies can man up too. Funny thing is its the ladies these days that MAN UP before the men actually do.
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Ala Carte? I think a lot of people are cutting the cord, and many more want to but cannot for various reasons, I think one way to slow this trend is to offer ala carte, if they did less people would want to cut in my opinion.
Re: I am keeping cable
said by IowaCowboy:So? Once you have it up you're set for the next decade or longer.
The OTA reception in my area (despite being an urban center) is poor. You need a roof antenna to get them.
If all that's stuff is worth $100 a month to you then that's your business. Other people are starting to question the value of the content they are paying for. Each person has a different view on what TV is worth.
I have my TiVo DVRs and me and my mother watch quite a bit of TV. She watches Turner Classic Movies, HGTV, Food Network, among others. I watch the Weather Channel, VH1 Classic, Fox News, local evening news, and listen to music choice.
Life -will- go on... I think it is comical how people say I gotta have channel x or y before I will cut the cord. Life will go on if you don't have those channels and really is it a necessity? Most likely, you will adapt and learn to live without. Cut the cord people and send a message. The only way they, cable co's and content producers, will listen is if you start leaving en masse. If you keep saying I gotta have my channel x and y, well nothing will change and they will keep raising the rates bi-annually. So suck it up or stop complaining...
not going very far How quickly we forget that cable co's are also ISPs. Choke with caps takes care of this idea. And with content holders refusing to sell to netflix the whole idea of dumping the obsolete business model this isn't going anywhere .
Re: not going very far
said by norbert26:You hit on a key point.
How quickly we forget that cable co's are also ISPs. Choke with caps takes care of this idea. And with content holders refusing to sell to netflix the whole idea of dumping the obsolete business model this isn't going anywhere .
The networks own the content. They decide how the customers get it.
It sucks for you that it's not on $10/month netflix, but a network is a business that wants to make a profit. If it thinks it can make that from a subscriber fee from a $100/month cable subscription instead of a small piece of a $10 netflix subscription, so be it. IT's their content.
Re: not going very far Theres nothing key about it. Its irrelevant. If they want to stay in business they will eventually have to sell to someone. People eventually have to pay for their product one way or another. Thats how they survive. We dont need them to survive. When are you all going to see you make the rules.
Could do without cable... but why? I could live without cable to save some money. I could also keep 60F instead of 75F inside. Or move to a cheap place, drive an old car, downgrade the internet to the lowest tier. I could also drink cheap beer instead of a $10 bottle of wine, get a fast food value meal instead of eating a fillet mignon at a restaurant, stay home instead of going on a vacation abroad.
It all boils down to affordability and the quality of life one wants to have.
Netflix streaming is a dumpster of old movies that I have ZERO interest in (I gave a try to Netflix 3 times over 5-6 years and it's just not worth it for me). Most things I watch are "cable exclusive".
It costs me $20+ to heat the house during ONE COLD DAY. I pay $20/day in property taxes alone. Cable is $2/day. I'll stick with cable. When I have more time to watch I'll get a subscription to the premium channels again.
| |MrHappy316Wish I had my tankPremium
Don't forget contracts Don't forget some of these folks that are in package deals and satellite are stuck in multi year contracts. As those contracts expire and people find they can get what they desire on OTA or streaming they will cut. Plus you have some who cannot afford the cancellation fees so they go lowest tier until their contract ends and then they bail.
We cut it last March Wife and I decided last march after seeing how much we were paying for cable TV and just how little we were actually watching it. For $80 we put up 2 antennas in the attic and get 30+ OTA stations. We don't have Netfilx (dropped when they raised the price and cause there wasn't much we wanted to watch), use Hulu occasionally, find lots of stuff via the net to watch.
Now we both use the net a lot for work and entertainment so paying $60/month for that is worth it for us. The $90/month extra for cable TV wasn't worth it to us.
Dubious numbers A) clearly the pay TV ( cable, satelite, FiOS, U-verse etc ) has not seen a 9% drop in subscribers. So those people are either lying or they mean they've cut back services( ie dropping HBO ) which is different than cutting the cord.
B) about the 11%. What you say you will do when you're pissed and what you actually do when it comes time to put your money wher your mouth is are 2 different things.
They all are flaky though I know lots of people who have tried to cut the cord, and in almost all cases they eventually went back, so that 9% that has cut the cord isn't a stable 9%, and for the 11% let's just say I've been saying I'd cut the cord for years lol.
When you have a non technical roommate, it's not worth having to download all his shows via bt and he won't know how to watch them online, truth is even if it was just me cutting the cord is a lot of extra work and on FIOS which I am, you don't save hardly anything, because the most expensive item on FIOS is the internet and I'm locked into a promotional rate for 2 years so it's not that bad.
I rarely pay more than the promotional rate, I just play the cable and sat companies off each other, works good for the past 10 years or so.
Now that I'm addicted to fast FIOS internet, I might have some trouble lol.
Re: They all are flaky though
said by MovieLover76:pay tv for most folks is like herion or meth. Hard to to get off of.
I know lots of people who have tried to cut the cord, and in almost all cases they eventually went back, so that 9% that has cut the cord isn't a stable 9%,
Yep. I believe it when I see it. Talk is cheap
and for the 11% let's just say I've been saying I'd cut the cord for years lol.
When you have a non technical roommate, it's not worth having to download all his shows via bt
Illegal and not worth mentioning. Shoplifting is a way getting stuff for free. I wouldn't do it though.
Using Netflix and Hulu is that hard?
and he won't know how to watch them online