Some 400,000 U.S. subscribers abandoned their pay-TV subscriptions in this year’s second quarter and joined the growing ranks of “cord cutters,” the most in more than three years. Cable TV fared worst, though satellite TV operators also suffered, according to Strategy Analytics’ research.
Strategy Analytics found that “cord cutters” are not “fringe” customers always out shopping for a better deal. Rather they place a high value on content — they’re 3x more likely to report watching video-on-demand (VoD) than mainstream pay-TV subscribers, according to “Endless Fun? Pay TV, Cord Cutting, and Churn.”
“The Pay TV industry has gotten it wrong on the topic of cord cutting,” said Ben Piper, director of the Strategy Analytics Multiplay Market Dynamics service and author of the report. “For the second consecutive year, our survey research clearly indicates that those who intend to cut the cord are high value, high-revenue customers—not the deadbeats they have been made out to be.”
Control of content, rather than price, is cord cutters’ primary motivation, and service providers should view that as an opportunity, he continued.
“Forty percent of Cord Cutters—compared to twenty percent of economic churners—said they would be willing to pay more than they currently do for Pay TV if it meant they could pick and choose content on an à la carte basis,” noted Piper. “Pay TV providers should view this as an opportunity to customize and repackage content offerings to this growing segment.”
