So-called “pay-TV refugees” now represent 13%–some 11 million—of U.S. broadband households, according to new research from TDG (The Diffusion Group). Pay-TV service subscriptions have fallen almost 5 percentage points among U.S. broadband TV households since 2010, indicative of the growing “cord-cutting” phenomenon, though pay-TV’s “grip” on U.S. households remains firm—87% currently subscribe to a pay-TV service, according to TDG’s “Pay-TV Refugees – A Primary Profile of Cord cutters and Cord Nevers.”

That said, growing numbers of U.S. broadband households “are now doing without pay-TV services altogether, having either ‘cut the cord’ or never signed up to begin with,” according to TDG’s analysis.

“Both target segments are broadband subscribers that do not currently subscribe to a pay-TV service (i.e., cable, satellite, or telco-TV). These are two sectors of a larger category of consumers known as Pay-TV Refugees,” the Frisco, Texas-based market research firm explains.

There are important distinctions between the two types of U.S. broadband households doing without pay-TV subscriptions, TDG found. So-called Cord Cutters are older, have higher annual income levels and are more likely to have children under 18 living at home. In contrast, nearly one-third of Cord Nevers are 18-24 years old. More than half have annual incomes under $30,000, and just 1/5 have children under 18 living in the home.

“According to our tracking research, the percent of broadband households doing without pay-TV has increased from 9.5% in late 2010, to 11.2% in late 2011, to 12.5% today,” Michael Greeson, TDG Founding Partner and Director of Research. “Though pay-TV operators rightly argue that OTT’s impact on basic video subscriptions has been negligible, when one focuses exclusively on broadband subscribers – those most likely to have access to OTT services – the numbers tell a different story.”

Looking to the future, TDG expects the number of Pay-TV Refugees to increase during the next five years, though it sees Cord Nevers as posing “the most immediate challenge for pay-TV operators.”

Younger consumers tend to be technophiles and are comfortable with sophisticated info technology, coming of age in a network-centric society. They’re also at the earlier stages of their working lives, which means they tend to have lower annual incomes than older age groups. Hence, they’re both more motivated financially and better equipped in terms of technological affinity to seek out alternatives to pay-TV, TDG points out.

“Imagine you were a 20-year old struggling to find a job (much less ‘the’ job), moving out on your own and for the first time faced with paying your own bills. Spending $80-$100 per month for a pay-TV service, though enjoyable, is more of a luxury than a necessity,” Greeson elaborated. “And by combining free over-the-air broadcasts with a couple of $8 per month OTT subscriptions and free online video, they can easily create an imperfect but sufficient substitution solution. And many will.”