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NewStudyShowsARiseInCordCutting8.2PercentDitchedPayTVIn2014,Up1.3%YoY|TechCrunch

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New Study Shows A Rise In Cord Cutting 8.2 Percent Ditched

Pay TV In 2014, Up 1.3% YoY
Posted 17 hours ago by Sarah Perez (@sarahintampa)

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Theres been some debate about how many consumers are actually cutting ties with their
pay TV providers and replacing them withover-the-top streaming media services a trend
generally referred to as cord cutting. But arecent studyindicates that the number of cord
cutters in North America is, in fact growing in 2014, 8.2 percent of former pay TV
subscribers surveyed by TiVo subsidiary Digitalsmiths said they ditched their service an
increase of 1.3 percent over the prior year. Meanwhile, a much larger 45.2 percent said they
reduced their cable or satellite TV service during the same time frame.
That latter item is sometimes referred to as cord shaving, as its reflective of the trend
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toward smaller pay TV bundles as consumers spend more time streaming video via over-thetop solutions like Netflix, Hulu or Amazon Instant Video, for example. Pay TV providers arent
necessarily losing these customers, but these subscribers are reducing their reliance on their
cable and satellite television offerings as they adopt streaming services. And insome cases,
dropping down to a smaller pay TV package isthe first step in becoming a true cord cutter.

The survey was based on a demographically representative sampling of 3,144 consumers in

the U.S. and Canada, ages 18 and older. And while its numbers referencing cord cutters are
notable, its worth remembering thatits a survey as opposed todata from service providers
there could be discrepancies between what consumers say and what they actually do.
For instance, 15.3 percent ofconsumers respondedthat they plan to either switch (3.1
percent), change (7.4 percent) or cut (4.8 percent) their pay TV service. More importantly,
32.4 percent said theyre on the fence about these things, meaning theres an opportunity
for pay TV providers to retain their business by offering new functionality like better user
interfaces on their set-top boxes, or the option to stream to smartphones and tablets.
The reduced consumer loyalty forpay TV providers was attributed to high prices and bad
channel selection.

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71.7 percent said that cable and satellites increasing fees left them unsatisfied. 38.1 percent
said these companies offered poor customer service, and 33.8 percent said bad channel
selection was to blame. By bad, consumers could be referring to an overabundance of
channels that they never want to watch, or it could also be related to the fact that its difficult
for them to find the programming they actually like due to lack of decent search options or
bettertargetedrecommendations.
Lately, some pay TV providers have begun going afterthe cord-cutting crowd with a la carte
offerings which allow them to personalize their channel line up. For instance, Cablevision
launched cord cutter packages in April and Verizon (disclosure:AOL/TechCrunch parent
company) introduced a la carte packages this year, too.
Survey respondentssaid they were interested in these sorts of options 81.6 percent said
they want to pick the channels they watch, and an ideal price point was, on average, $38 per
month.
The so-called skinny bundles are reflective of a changing mindset about the value of pay TV
and its many, many channel options. 33.4 percent say their overwhelmed with the number of
channels available and most (81.7 percent) only watch between 1 and 10 channels. Many in
that group (39.7 percent) watch 5 channels or fewer.

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In addition to pay TV providers move to embrace a la carte programming,Dish launched its

own over-the-top streaming TV service called Sling TV that provides a basic cable bundle for
a reduced fee. And thereareother ways to access network TV programming without cable,
too, including via Hulu, CBS All Access and PlayStation Vue, for example.
Consumer awareness around these cable alternativesis growing. Over half (55.7 percent) of
respondents were familiar with one or more of these services, with Hulu being the bestknown with a 51 percent mindshare. Sling TV followed with 11.9 percent awareness, then
PlayStation Vue (11.4 percent) and CBSs offering (10.5 percent).

Meanwhile, other streaming services like Netflix and Amazon Prime Instant Video offer more
ways to watch movies and TV, even if they dont include all the currently airing programs.
As of Q1 2015, 54.4 percent of respondents said they were leveraging a monthly
subscription service like Netflix or Hulu, and the largest group of respondents (33.1 percent)
said they watched 1 to 5 hours of content on these services each month. However,
consumers are beginning to increase their time spent on these services there was 2.3
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percent quarter-over-quarter growth in respondents who watch 15 to 30+ hours.

Their willingness to pay a little more is growing too. While most (51.8 percent) pay between
$6 and $11 per month, the $9 to $11 category grew 2.5 percent year-over-year and is up 6.1
percent over Q1 2013. And the$12 to $14 category grew 2.2 percent year-over-year, and is
up 4.2 percent over Q1 2013.
The draw of these services arent just the reduced cost, though 51.1 percent cited that as a
factor in their use. Theyre also seen as more convenient (60.1 percent agreed on this), with
better selections of content (38 percent said).
Whats interesting though is that people are also enjoying the way these services let them
watch TV instead of waiting for new episodes, many are now binge-watching shows, or at
least are happy to beable to access a full season of programming at once. This featurewas
cited by 47 percent of respondents as being a big draw for the over-the-top services.

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NewStudyShowsARiseInCordCutting8.2PercentDitchedPayTVIn2014,Up1.3%YoY|TechCrunch

Digitalsmiths has been running itssurveys since 2012, however,it was only last year that it
began tracking consumers interest in cutting the cord entirely.But now that the metric is
beingtracked, moredata on this trend will be available in future studies.
This was post #9 in an ongoing series about cord cutting in 2015 which examines trends around
cord cutting and reviews new services that aid inditching pay TV. You can read more of the series
here:

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NewStudyShowsARiseInCordCutting8.2PercentDitchedPayTVIn2014,Up1.3%YoY|TechCrunch

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DavidIngmire TopCommenterUniversidadedeMichigan
Thebetterstoryarethe7.5%thatcutInternetservice.Why?
ReplyLike

1FollowPost12hoursago

JeremyLoweBoston
Ijustcutmycord.Celebrations!
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