Several studies have been released in recent months that suggest that "cord cutting," or dropping traditional pay TV service in favor of Internet-based alternatives, is no longer only a niche phenomenon.
Research from the New York Times presented at an Oct. 10 "audience monetization" summit shows that as many as one-third of "millennials" (people born between the early 1980s and early 2000s) watch no broadcast TV whatsoever. Instead, the research shows that these people "mostly" watch video online.
Popular places where millennials watch online video include dedicated video-hosting platforms like YouTube, social media platforms, and news websites. The overwhelming reason why people watch online video, the NYT survey concluded, was "to be entertained."
As many as 2.7% of current pay TV subscribers are considering dropping their subscription in the next year, according to a Magid study presented Sept. 24 at a Goldman Sachs-hosted conference in New York. (Magid is a research and consulting firm.) That's up from 2.2% in 2012 and 1.9% in 2011.
People who discontinue their pay TV subscription are commonly called "cord cutters." Similar groups include "cord nevers" (young people who never sign up for a pay TV subscription) and "cord shavers" (people who retain pay TV service but opt for a less expensive tier).
"Cord-cutting used to be an urban myth. It isn't anymore. No, the numbers aren't huge, but they are statistically significant." Craig Moffett, Moffett Research
Cable companies have attempted several strategies to combat the lost revenue caused by cord cutting, including raising the price of broadband or charging for equipment that had previously been free to use.
Comcast has debuted a new, cord cutter-friendly service tier called "Internet Plus" that includes (depending on the market) a 20-25 mbps Internet connection, several local TV channels, and HBO/HBO Go. The tier costs between $40 and $50 per month for the first 12 months, then jumps to $60-$70 per month thereafter.
Time Warner Cable in December 2013 introduced a new service tier called "Starter TV with HBO," which costs $30 per month (for the first 12 months) and is aimed at cord cutters. The tier, which does not include Internet service, includes HBO and 20 basic channels.
ABC has said that, come Jan. 6, users will need a pay TV subscription to be able to see TV shows on the company's website within a week after they first air. Users without such a subscription will still be able to watch these shows, but will have to wait a week to do so.
John Malone, the current chairman of Liberty Media and former CEO of early cable TV provider TCI, said Oct. 10 that cable companies should work together to create an Internet-based Netflix rival, in part to help lower programming acquisition costs. Malone was speaking at Liberty's annual investors' conference.
"And because he didn't get the news, he didn't know mutant bunnies were on the loose." The Hole Saga
ABC on Jan. 6 began restricting access to its TV shows online. Viewers must now have a compatible pay TV subscription in order to watch their shows up to a week after they've first aired. Users without a pay TV subscription will now have to wait a week to watch the shows online.
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