Nearly 6% of pay-TV subscribers say they are “very likely” cutting the cord this year, 50% more than were considering it a year ago, according to a study from researcher Frank N. Magid Associates. In its annual Magid Media Futures report, the industry researcher said that among Millennials, a recognized at-risk demographic in the pay-TV industry, that number was a whopping 9%.
“There is a slow, slow drip of cancellations for the pay-TV companies and it is growing every year,” said Mike Vorhaus, the president of Magid Advisors. “Pay-TV companies will have to work hard to maintain their relationship with American consumers, through standard cable/satellite bundles, other services like Internet access, and skinny bundles. The competition is tough between traditional and new media providers of video content to consumers.”
In 2011, just 2% of consumers said they were considering cutting the cord, Magid said. Last year the number was 3.8% and in 2016, 5.7%.
The availability of premium content from online video streaming services like Netflix and Hulu was given as a reason by 70% of those responding to the survey from Magid, which went to 2,400 U.S. consumers.
A majority of subscribers said they would consider a skinny bundle to replace the standard pay-TV bundle and said they would be willing to pay $48 a month for such a service.
Service providers have been scrambling to find ways to slow the gradual erosion of their subscriber base. Many have begun offering skinny bundles, and several are even offering streaming options of live linear content to Internet subscribers in their footprint, with no need to subscribe to pay TV, a big change from the TV Everywhere play of recent years. And, of course, Dish Network’s Sling TV, PlayStation Vue and, soon, DirecTV Now and Hulu, all offer substantial bundles of content at reduced rates.
Follow me on Twitter @JimONeillMedia and on LinkedIn