July 14, 2016 by Paul Dughi
In recent years, it’s been typical to find cable and satellite penetration numbers reaching into the low-to-mid 90% range in most metro areas. That’s changing.
According to a study released today from GfK, this cord-cutting thing is real. I know, people have been talking about this for a while, but the trend line was small enough to keep an eye on, but not overly concerning (unless you’re a cable or satellite company and then you’ve probably been monitoring this relentlessly).
Now, according to GfK, homes with broadcast (over-the-air) TV reception and internet-delivered video subscriptions has now reached a significant threshold:
25% of US homes are without cable or satellite
The research, from GfK’s 2016 Ownership and Trend Report from The Home Technology Monitor™, shows that 17% of US TV households now rely on broadcast-only (a.k.a. “over-the-air” or OTA) reception, up from 15% in 2015. Another 6% say they only use Internet services such as Netflix, Amazon Prime, Hulu, or YouTube and do not have traditional broadcast or pay TV reception at all; this compares with 4% a year ago. – GfK
The younger households are those most likely to go without satellite or cable for their TV, although they may be using the cable company for their internet. 22% of those 18-34 fall into that category. I would assume a lot of those are what we call “cord nevers,” meaning they have never had cable/satellite services as opposed to “cord cutters,” who have discontinued the service. Overall, according to the study, nearly 40% of 18-34 household households rely on some kind of alternative TV reception or video source, versus 25% of all homes.
“The fact that a statistically significant increase in broadcast-only reception occurred over just one year may be further proof that the cord-cutting/cord-never phenomenon is accelerating…If you include homes that have no TVs at all – about 3% of all households – then less than three quarters (73%) of US homes continue to have pay TV service, with the attendant implications for all stakeholders – not just the pay TV services themselves, but also networks, content providers, and advertisers.” – David Tice, SVP in GfK’s Media & Entertainment practice.
In response to the newly released GfK Ownership and Trend Report that found a sizeable increase in over-the-air TV households, the following statement can be attributed to National Association of Broadcasters Executive Vice President of Communications Dennis Wharton:
“The GfK survey demonstrates once again the enduring value of local and network broadcast television. It’s particularly noteworthy that millennials are now more reliant on broadcast TV than any age group. Clearly, the Internet has had a major impact on how Americans receive program content, but GfK confirms that broadcast television remains remarkably resilient and growing in popularity.”
Nielsen numbers are different
Nielsen, the industry leader for monitoring ratings and trends in television, has different numbers than Gfk. Nielsen says the number of broadcast (over-the-air) TV homes did increase during 2015 by more than 700,000. That puts the number at 13.3 million homes in 2016 (an increase of 6.5% over the same time period last year). Roughly half of those homes also have broadband.
“Substantial replacement” is unlikely
While Nielsen predicts some continued growth in cord cutters, it’s been monitoring the trend for years, including watching intention and action.
“The increasing popularity of online-only video services will continue to put pressure on networks and cable and satellite TV providers, but a substantial replacement of one for the other is unlikely. “While some consumers are cutting back on traditional TV services, many aren’t severing the cord completely. – Megan Clarken, president, Nielsen Product Leadership