Fifteen Percent of Adult Americans Are Already "Cord-Cutters," Study Finds

Illustration by: Paweł Jońca

Also: Nine percent of American adults are cord-nevers, meaning they never bothered subscribing to cable or satellite TV in the first place.

Cord-cutting could be a bigger problem than the TV industry — and Wall Street — realizes, if a study from Pew Research indicating that 15 percent of Americans have already canceled their cable and satellite television is correct.

The Pew Home Broadband 2015 study also found that 9 percent of American adults are cord-nevers, meaning they never bothered subscribing to cable or satellite TV in the first place.

The cord-nevers plus the cord-cutters suggest that 24 percent of Americans do not subscribe, and among those, 71 percent say the reason is that such services are too expensive.

Sixty-four percent say they don't subscribe because the content they want is online or even available via an old-fashioned TV antenna, while 46 percent don't watch TV enough to warrant a cable or satellite subscription.

Young adults are the most likely to be cord-cutters, with 19 percent of Americans ages 18-29 telling Pew that they have canceled their cable or satellite service while another 16 percent from this age group say they never subscribed to begin with.

Cord-cutting has become arguably the most pressing issue in the entertainment industry, with Disney, Viacom and others warning four months ago that growth at their cable channels would slow or reverse. Disney's ESPN has dropped 7 million subscribers in the past two years, for example.

Beyond cord-cutting and cord-nevers, another phenomenon are "cord-shavers," a term referring to people who subscribe to fewer channels — skinnier bundles  — than they used to. The Pew study didn't address cord-shavers.

Since early August, when investors learned that cord-cutting was perhaps a more serious concern than some were letting on, the stocks of various companies have fallen. Disney, for example, is off 11 percent since then, while Viacom is down 26 percent, AMC Networks is off 10 percent, Starz is off 13 percent and Discovery Communications is down 18 percent.

Pew also notes that wages play a big role in determining whether Americans will or will not subscribe to TV services, with 63 percent of homes with annual incomes under $20,000 having cable or satellite TV compared to 86 percent of households where annual income exceeds $75,000.

The study also indicates that in-home broadband may have plateaued, given that subscriptions fell to 67 percent now from 70 percent two years ago, as more people rely on their smartphones for their Internet connection.

Pew says that, among those 24 percent of American adults who do not have cable or satellite TV service, 70 percent have smartphones, 54 percent have a home broadband subscription and 25 percent are "smartphone only" when it comes to their Internet connection.

Pew's research was based on surveys conducted with 2,001 adults from June 10-July 12.

Email: Paul.Bond@THR.com

comments powered by Disqus