After previously denying the cord cutting trend was even real, Nielsen earlier this year finally acknowledged there was a shift afoot, noting that the percentage of people who have just OTA and broadband jumped 22.8% as cable bills get higher and Internet video options get better. Now a new study by GFK Media
finds that OTA video consumption has jumped 17.4% since last year, from 46 million to 56 million.
The firm also found that 6% of U.S. TV homes, or around 6.9 million homes, have canceled pay-TV service, with 70% of those citing cost-cutting as their motivation for pulling the pay-TV plug. 20% cited the availability of growing online viewing options as a reason.
That's not a particularly surprising trend given constant cable industry rate hikes, something that numerous analysts and firms (including Standard and Poor's
) have argued isn't sustainable in the face of growing traditional TV alternatives. The cable industry hasn't listened, and the data is slowly but surely showing the result.
After highlighting data consistently showing that there's a small but growing contingent of users annoyed with high cable prices, analysts at places like Nielsen and GFK for whatever reason then immediately feel the need to poo poo their own findings and downplay fairly obvious trends (however small). For example, GFK analyst David Tice blogs that he's a professed cord cutting skeptic, and that he's still not really on board the cord cutting reality train:
Does online or streaming video play a role? Certainly, there is no denying that it plays an important part. But is it the primary driver of people moving back to broadcast-only reception? Our data doesn’t strongly point to that conclusion. The real test will be when – or if – the economy picks up; then we’ll see if people maintain their broadcast-only status. That’s when I’ll decide if I’m a convert to classifying homes as “cord-cutters”
or maybe we need some new denominations such as “cost-cutters”, or even “OTA opt-ins."
Users are fleeing to OTA because of ridiculously high cable prices from a sector that absolutely refuses to compete on price. That goes hand in hand with the growing availability of streaming options, most of which we haven't even seen truly blossom yet. As it stands, most of the streaming options we're seeing are paywalled gardens constructed by an industry terrifying of giving consumers what they want (see HBO's refusal to offer a standalone HBO Go product
Guess what happens to these numbers when these cost-strained users have more than just Netflix, Hulu and OTA to choose from?