The newspapers have been full lately of stories that (a) claim cord-cutting will have no impact on pay TV viewing, or (b) show an increasing number of TV viewers are dumping (or strongly considering dumping) cable TV packages in favor of broadband video, or broadband plus over-the-air digital TV.
On the “it’s no big deal side,” you’ll find ESPN and Frank Magid Associates, while the “cord cutting is a growing trend” camp is represented by Parks and Associates, Time Warner, and SNL Kagan. While both sides acknowledge that the pay TV industry suffered its first-ever net loss of subscribers from April to September of this year, they disagree on the reasons.
ESPN and Magid claim that the total subscriber churn is less than 1%, and may be as low as one-quarter of one percent. They attribute the drop-off to the recession and expiring triple-play special deals. Parks points to the explosion in sales of Internet-connected TVs (NeTVs) and connected Blu-ray players and DVRs. Time Warner, in the meantime, just launched a lower-price basic “popular demand” channel package to hold on to subscribers, and will be followed by Charter Communications shortly.
Time for some clarity! According to a story on paidContent.org, Needham & Co. analyst Laura Martin reported the results of a simple request she made of 300 respondents in October: “Please list which TV channels you must have available online in order for you to turn off your pay TV subscription.”
Guess who sat at the top of the list? CBS, named by 35% of respondents. The #2 slot was filled by ABC (right behind at 34%), while Fox was in a tie with NBC at 31%.
The highest-rated pay TV network was (no surprise) ESPN, listed by 27% of respondents. The rest of the top ten was made up of Discovery (19%), History Channel (14%), HBO (11%), Comedy Central (10%), and The Food Network (also 10%).
It’s interesting that the top four networks are also available in many markets for free as over-the-air digital TV broadcasts. That also may explain why some cord-cutters are quick to dump cable TV and get their TV fix with antennas and a broadband connection. (For what it’s worth, PBS finished in a seven-way tie with The CW, MTV, HGTV, CNN, Lifetime, and Bravo.)
The paidContent article comments that most respondents who voted for at least one over-the-air TV network also listed the rest of them. “Most folks think of the four broadcasters as a monolith,” said Martin. “This may be because consumers actually watch shows on all four broadcast networks, or it could be because they have no idea which network their favorite shows are on.”
For viewers who live near major cities, it’s not unusual to have as many as 30+ minor channels of free, over-the-air programming available. Those viewers are also more likely to have fast broadband, so cutting off cable or satellite TV still leaves them with plenty of program choices…and apparently, their ‘can’t live without’ TV networks as well.
So yes, you can find some happiness in the world of free TV…so long as you are willing to part with a few cable and satellite networks, and have a good broadband connection for Hulu, Netflix, YouTube, and other Internet TV channels.
To Readers: How about you? Would you be willing to drop cable or satellite TV, and just live with what you can watch using an antenna and a fast Internet connection? Or maybe you’ve already cut the cord? I’d like to hear your comments one way or the other.
Posted by Pete Putman, December 8, 2010 2:21 PM
About Pete PutmanPeter Putman is the president of ROAM Consulting L.L.C. His company provides training, marketing communications, and product testing/development services to manufacturers, dealers, and end-users of displays, display interfaces, and related products.
Pete edits and publishes HDTVexpert.com, a Web blog focused on digital TV, HDTV, and display technologies. He is also a columnist for Pro AV magazine, the leading trade publication for commercial AV systems integrators.