An interesting study was just conducted by consulting firm cg42 and it claims that pay TV service providers stand to lose as much as $1 billion in revenue over the next 12 months. The reason? Cg42 says that as many as 800,000 customers are likely to ‘cut the cord’ in an attempt to save money on pay TV packages and bundles.
Cg42 surveyed 1,119 customers online this past summer and calculated that pay TV companies could lose as much as $1,248 per lost subscriber on an annual basis. In their survey, they found that the average pay TV subscriber spends about $187 per month for cable TV, phone, Internet access, and video streaming subscriptions.
In contrast, ‘cord nevers’ – people who have never subscribed to pay TV services – spend about $71 per month on broadband access and video streaming subscriptions. The streaming part of that amounts to as little as $15 per month.
Cg42’s survey revealed that both cord-cutters and cord-nevers don’t care much for traditional TV programming, and 83% of cord-cutters said they can access most or all of the content they want to watch without a pay TV subscription. (87% of cord-nevers said the same thing.)
Perhaps more ominous for companies like Comcast and Time Warner, the satisfaction of watching TV without paying for cable or satellite services increases the longer these viewers remain away from pay TV subscriptions.
The most popular streaming service is still Netflix, which 94% of respondents subscribe to. And number 2? YouTube’s free video channels, which offer selected clips from late night talk shows and musical performances.
Surprisingly, many respondents get their sports fix by going to bars or restaurants to watch games. The survey didn’t mention how many people also watch sports on free over-the-air TV, which of course includes NFL games, selected baseball games and the World Series, the NHL playoffs, and the NBA playoffs, plus the Olympics, golf, tennis, and NASCAR/Indy Car racing.
Surveys like these aren’t anything new. We’ve seen analysts forecasting the end of traditional pay TV packages for several years now. However, there is a real concern about the cost of these monthly services, and whether they’re worth the price.
I’ve advised numerous folks on how to get free over-the-air television and supplement it with streaming services to save money – and in fact, later today, I’ll be visiting someone nearby to do an RF site survey and see how well he can receive the local Philadelphia stations at home (upward of 50 minor channels).
Couple that with broadband service and there’s no real reason to stay with pay TV, especially now that you can subscribe to HBO and Showtime online without a pay TV service. You can also do without landline phone service if you have a mobile phone, further reducing your monthly expenditures.
I said this a few years ago in several columns: The future of cable TV is providing broadband service. Just like mobile phone companies charge you only for data (phone calls and messaging are basically free now), so will cable and satellite companies. They will look more like the electric company, charging you for however many gigabytes you used that month.
And how you use the data will be up to you: sending and receiving photos, streaming video, emails, and voice-over-IP. That’s the real future of Comcast, Time Warner, Charter, Bright House, and other MSOs. The question is, have they accepted it yet?
Posted by Pete Putman, September 30, 2016 9:28 AM
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.