VAB: Cord-cutting is economic phenomenon

The Video Advertising Bureau (VAB) claims that cord-cutting is caused by consumer’s economic difficukties rather than onslaught of direct-to-consumer video choices.

A VAB white paper states that the 625,000 Americans who cancelled their pay-TV subscriptions in the second quarter were primarily in lower-income homes, featuring not just millennial residents, but older citizens too – with 59 per cent of cord-cutting households having annual incomes of less than $50,000.

“What many in the media business have automatically interpreted as a statement of content preference turns out to be simply a cost-cutting measure,” reads the white paper.

“The majority of cord cutters and cord nevers cannot afford multichannel TV subscriptions,” it adds. “These people are not targeted consumers for many of the most advertised products on TV today.”

The VAB said that use of streaming video by younger consumers is additive to their overall TV consumption, not an alternative to linear use.  Streaming, the group said, “is predominantly TV fans adding flexibility and dimension to their video viewing. TV shows remain the vast majority of streamed programming, while MVPDs are fast expanding their exclusive catalogues of video on demand.”

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