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February 23rd, 2016

Cord Cutting Is Still Just A Buzzword And Not (Yet) The Norm

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We want to let go … we just don’t.

Cord cutting may have cable companies looking over their shoulder, but the number of people who have actually disconnected their television service remains low.

According to Salesforce Research’s 2016 Connected Subscriber report, cutting the cord is still more of a buzzword as opposed to a lifestyle choice. The report said that 15% of Millennials had disconnected their TV service in the past 12 months, while only 9% of Generation X and 3% of Baby Boomers had become cord-cutters. Only 4% of the former and 6% of the latter planned to do so in the future, with 8% of Gen Xers thinking about it.

Given the fact that cord-cutting has become a topic of conversation in the media and communications sector, the report shows that pairing different content delivery options is more widespread than actual disconnection. Over-the-top services and access to content through mobile devices can dovetail with cable providers, especially when considering the current appetite for binge-watching and on-demand consumption.

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More than 2,000 American adults aged 18 and over were interviewed on behalf of Salesforce by Harris Poll with generational differences taken into account. More than 1,950 people were subscribers to a communication service provider—defined by the report as wireless phone companies, cable providers, telecom carriers and satellite providers.

Cost Is A Factor In Cord Cutting

The main reason that people look into alternatives to cable TV service is cost, the report said. Fully 56% of cord-cutters said that the service was too expensive and 32% had technical issues with the hardware. Bearing in mind that over-the-top (OTT) subscription services such as Netflix or Hulu offer instant access to quality content as their value proposition, only 15% of respondents to the report cited a lack of good content as the reason to disconnect.

We are living in the age of the customer. Every customer and everything is becoming digital and connected,” said Andy Baer, Salesforce’s senior vice president of global communications and media industry, in a press release. “To stay competitive against industry disruptors, like Netflix, Hulu and Google Fiber, telcos and cable companies are pivoting to put the customer experience first.”

cord_cutting

Source: 2016 Connected Subscribers report

Bad customer service was one reason that people walked away from their provider, said the report. Around 23% of people said that a lack of support prompted their decision, although billing and complex pricing bundles scored 16% and 13%, respective. In some cases, people just didn’t want a TV service at all … 14% of people were content to just turn it off.

The obvious reason for customer dissatisfaction would be the availability of alternatives. Streaming services have proliferated in recent years and cable companies have been running to catch up. All of the major providers now offer an on-demand service as standard, but popular streaming platforms are part and parcel of overall content consumption.

cord_cutting_alternatives

Source: 2016 Connected Subscribers report

Video streaming has disrupted how and when we watch television shows, sports events and movies and cable companies are certainly not the only game in town.

See also: 15% Of All American Adults Are Already Cord Cutters

The report said 61% of Millennials purchased alternative streaming services, compared to 46% of Generation X and 24% of Baby Boomers. Non-traditional content providers like Netflix and Amazon Prime have invested in original shows to sit alongside their licensed content, which is probably why cable companies are eager to provide subscribers with hundreds of network-heavy channels.

Content Can Be Accessed Anywhere

The ubiquitous smartphone has also played a role. A recent report from Pew Research said that 75% of cord-cutters owned a mobile device and 84% of these people cited advanced Internet access through either a smartphone or home broadband as preferred means of access. Media networks have increased the number of mobile apps available so that we can watch content on-the-go and cable providers have followed their lead, the report said.

However, watching content is not the prime focus.

Support services is the main reason why subscribers use a CSPs mobile app, said Salesforce. Viewing and paying bills, troubleshooting technical issues, purchasing new services and filing complaints are all popular ways of engaging with a mobile app.

cord_cutting_support

Watching content—the main purpose of why you would want cable in the first place—is still a high priority for cable subscribers on an app (53%) but it is notable that subscribers to other CSPs used the app to conduct more mundane activities.

“CSPs are being disrupted by OTT content providers shaking up the industry with streaming video and audio services,” the report said. “However, CSPs have an opportunity to win. Those who embrace technology to create seamless customer experiences and put customers at the center of their businesses will be far more likely to succeed in the future.”

  • notsofastnow

    Who on earth did the Harris Poll interview and how on earth did they contact subjects to be interviewed? I agree that cable is still the norm, but it’s declining fast in the circles I frequent. I’m a baby boomer who cut the cord last year. My older sister dumped her cable bundle a little over a month ago. Another sister has never subscribed to cable, and a third is a cord shaver. Several of my coworkers are also in cord cutting or cord shaving mode.

    There’s going to be a tipping point similar to what we’ve seen with mobile phones. How’s the land line business these days? It survives only because it’s included in so many cable bundles.