by Joanne Zornow
TV execs are twitching as they note a growing trend among subscribers to drop television but keep high-speed Internet access for watching TV programming. Although the current number of cord cutting households is low, it does appear to be a growing trend. About one in ten (11%) U.S. households do not subscribe to cable, digital or satellite TV, but do have high-speed Internet, according to GfK MRI’s Fall 2011 Survey of the American Consumer.
Nearly one-half (44%) of consumers living in Cord Cutter households also live in cell-only households. That percent has increased from 8% in the Fall 2010 Survey. Even though the vast majority of households (80%) still buy cable, digital or satellite TV, the increase in cord cutting households indicates that this is a phenomenon programmers and cable MSOs are wise to watch closely, since it may impact revenue from monthly cable subscriptions.
TV and Internet use
It seems safe to say that most, if not all, consumers living in households without TV but with high-speed Internet watch television online. Consumers who live in cord cutting households are heavy online users, indexing 163 for being in the highest Internet quintile. They also are more likely than typical adults to use the Internet for viewing movies and TV programs:
- Watched a movie online — Index 271
- Downloaded a TV program — Index 256
- Downloaded a movie — Index 250
- Watched a TV program online — Index 242
More telling, they index 297 for visiting the online video service Hulu.com in the last 30 days.
Although frugality is surely part of the impetus to become a Cord Cutter (who likes to pay for content when they can get it for free?), it may not be the whole story. Cord Cutters might also be motivated by portability and the “wow factor” of new technology. For instance, they have an index of 192 for having watched a movie, TV program or other video on their mobile phones in the last 30 days.
Who cuts the cord?
Cord Cutters are more likely than adults, as a whole, to be young, Asian, well educated, live in households with above average incomes and reside in the Pacific marketing region.
|Demos of Consumers Living in Cord Cutting Households|
|Education – Post graduate||155|
|Pacific Marketing Region||134|
|HHI – $100,000+||117|
|HHI – $200,000+||110|
|Source: GfK MRI Survey of the American Consumer, Fall 2011|
Freelance writer Joanne Zornow has been editing Gfk MRI’s client newsletter, The Source, since 1992. This story originally appeared in the Dec 2011 issue.