Perhaps 13 percent of U.S. consumers will drop all or parts of their linear multi-channel video entertainment services in favor of over-the-top video in the next 12 months, says Vince Vittore, Yankee Group analyst.
That would be virtually unprecedented behavior, and likely is a much-faster change in consumer behavior than some suspect will happen at some point.
Though still just a small segment of the population right now, Yankee Group believes that at least 25 percent of consumers will consider some form of linear video “cord cutting” move within the next 12 months. That could range from a complete cessation of service to the more likely steps of cutting off use of premium channels and video-on-demand services.
According to Yankee Group’s latest survey, about 21 percent of respondents say they “will never cancel” their video services. Nearly half have never thought about it. Some 13 percent say they would consider abandoning their video subscriptions, while seven percent say they are considering it. Only two percent of respondents say they already have cancelled service.
“While we certainly don’t believe that everyone considering coax-cutting will make the jump, we think a high percentage of the seven percent that already are considering it will act on the thought,” says Vittore.
“Assuming that perhaps half of the 13 percent who say they didn’t know about coax-cutting but would consider it, plus a relatively small percentage, say less than 5 percent, of the 47 percent who say they haven’t thought about it at all make the move, we conclude that at least one in eight consumers will cut off pay TV services completely or move down to a basic service over the next 12 months,” Vittore says.
Age and connected device usage play a role, Vittore says. Consumers who do cut off all or parts of their video services will be relatively young, highly mobile or heavy gamers. Gaming consoles and Internet-connected TVs represent the greatest threats as these are the devices consumers will use to avoid paying for video services.