It may seem like the golden age of cable and the age of internet TV is upon us, but when you get right down to it, a whole lot of households still subscribe to monthly pay-TV. That said, the latest edition of an annual survey does indeed find that both cable prices and cord-cutting are on the rise — a completely coincidental pair of facts, we’re sure.
The firm that published the data, Leichtman Research Group, has been running annual pay-TV subscriber studies for 14 years. That gives it a decent set of data — from a time when ordering rental DVDs online through Netflix was a new and novel idea, to the present day.
For all that cord-cutting is a true trend, it’s a slow one. The study finds that about 82% of households are subscribing to a traditional pay-TV (cable, satellite, or fiber) service. That’s still a drop of several million viewers from the 2011 high of 87%, but it’s comparable to subscriber numbers from 2005, before the economy crashed or internet TV became a thing.
The study looks at consumers who identify as new to pay-TV, and also those who identify as new to not having pay-TV — basically, consumer growth and cord-cutting.
About 1% of pay-TV subscribers were new to it in the past year, Leichtman found. That’s consistent with 1% being new to pay-TV in 2015 as well… but well below where things stood a decade ago. In 2006, 3.5% of pay-TV subscribers they spoke to were new to the service.
That implies that fewer new customers are signing up — the generation of “cord-nevers” that are forming new households all the time but not putting cable service in them. Like the folks who moved in the past year: the survey found that a quarter of those who moved didn’t bother subscribing to pay-TV service at their new address.
Indeed, other data Leichtman gathered also points to the cord-nevers and cord-cutters gaining traction. About 6% of the households they surveyed have never subscribed to pay-TV. Another 6% subscribed in the past, but more than 3 years ago, and another 3% don’t subscribe now, and cut their service sometime in the last 1-3 years.
On top of that, 7% of the current subscribers took at least a month off from subscribing sometime in the last two years, and another 6% said they’re likely to cut the cord in the next six months.
And why is that? Well, prices are indeed going up. The average monthly bill is now up to $103.10, the survey found, an increase of 4% from last year. (The current rate of inflation in the U.S. is about 1.1%, give or take, so cable bills are surpassing that.) That 4% increase is, however, the lowest year-over-year increase the survey has noted in the last five years.
Also of note: 12% of subscribers Leichtman surveyed said they plan to switch from their current provider in the next six months. One wonders how much higher that number would be if most cable subscribers had access to actual competition.
by Kate Cox via Consumerist
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