Cord Cutting: Big Deal or Big Talk?

by Joanne ZornowTV 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 slowly growing trend. Nearly 8% of U.S. households do not subscribe to cable, digital, satellite or fiber optic TV, but do have high-speed Internet, according to GfK MRI’s Fall 2011 Survey of the American Consumer.

That percent was almost 7% in the Fall 2010 Survey and just under 6% in 2009.
Even though the vast majority of households (83%) 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 170 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 307
  • Downloaded a TV program — Index 296
  • Watched a TV program online — Index 276
  • Downloaded a movie — Index 275

More telling, they index 334 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 181 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 and reside in the Pacific marketing region.

Demos of Consumers Living in Cord Cutting Households
Demographics Index
Asian 233
Age 25-34 170
Pacific Marketing Region 152
Education – Post graduate 141
Age 18-24 129
Age 35-44 120
Source: GfK MRI Survey of the American Consumer, Fall 2011

Joanne Zornow edits The Source newsletter for Gfk MRI.

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