Advanced Television

Research: Cord cutting is real

October 11, 2010

A survey from Wedbush Securities shows that US consumers, especially price-sensitive ones, are dumping pay TV services but sticking with the Internet.

Whether cord cutting is a real danger or just an overhyped phenomenon is frequently debated in the industry. Analysts say it is difficult to say whether customers who quit their cable programming packages are switching to competitors or stopping service altogether.

However, Wedbush Securities said their research shows that customers are getting rid of their cable and satellite TV services to a greater extent than they’re dumping their Internet connections – a sign that customers are watching on the Web.

In a survey of 2,500 consumers, 7 per cent said they had stopped using basic cable service and 12 per cent reported cutting their premium cable or satellite services. Two per cent of respondents cancelled their Internet connections.

Webush also found that cord cutting was more related to income than age, despite the common view that younger consumers would be among the first to abandon traditional pay TV. Homes with income under $50,000 cancelled basic cable at the highest rate, 8 per cent, while only 3 per cent of higher-income homes, those at $100,000 and above, axed basic cable, according to the survey. Those numbers include those who may have switched to other TV options such as Verizon FioS. When asked about their expectations for next year, 21 per cent of households in the under $50,000 bracket said they’d cancel their basic cable next year.

Categories: Articles, Broadcast, Consumer Behaviour, Pay TV, Research