Despite the rise of streaming video, most US pay-TV households are still not cutting the cord even when they subscribe to one or more streaming video services, according to a new study.
In its latest "State of Cable" survey of 1,000 readers, CableTV.com found that slightly over 70% of them still have traditional pay-TV packages, while the remaining 30% have cut the cord in favor of streaming services. More notably, though, 91% of those who still have a legacy pay-TV service also subscribe to at least one streaming service, indicating that most pay-TV customers now subscribe to both types of premium services.
"We were surprised to learn that a majority of respondents didn’t cut out cable in favor of cheaper, simpler streaming TV services in this time of great uncertainty," the study's authors wrote. "Streaming TV services are increasingly popular, but cable and satellite TV aren’t dying off as fast as we might've thought—and many of our respondents get both cable and streaming TV services instead of switching."
Further, the CableTV.com study found that 58% of legacy pay-TV customers subscribe to two or three different streaming services. The authors posit that this means that subscribers are supplementing their live TV channels with on-demand streaming services like Netflix and Amazon Prime Video.
Not surprisingly, the high cost of legacy pay-TV bundles was the dominant reason why viewers cut the cord. In the survey, nearly three-quarters (74%) of cord cutters cited price as the number one reason for kissing traditional pay-TV goodbye. Plus, slightly over 7% cited the "unsatisfactory bundle savings" offered by cable and satellite TV providers.
"That makes sense, since so many of us tightened our belts for the lockdown," the study's authors wrote. "Cable and satellite TV are so much more expensive than streaming TV services, and entertainment budgets are typically the first cuts."
But high pay-TV prices played a role even before the pandemic-induced lockdowns. In the survey, nearly three-quarters (73%) of the cord cutters made the move more than a year ago, suggesting that "COVID-19 wasn't the catalyst for most of our readers to get rid of cable," the authors concluded.
[Ed. note: CableTV.com makes money from affiliate relationships with TV providers and other links on its site, including, presumably, streaming services. It's worth noting that the site does disclose that it is a lead funnel for service providers and other companies, and that behavior can tilt where it places stories and how often it covers some services.]
Streaming savings
Nearly 80% of the survey participants claimed that they saved more than $30 a month by cutting the pay-TV cord. The authors note that this makes sense because "bundle discounts aren't that great anymore" for subscribers. "The average that we see at CableTV.com is $5–$10 a month—and some bundles have no baked-in savings whatsoever," they wrote.
Of the leading US pay-TV providers, Charter Communications' Spectrum service saw the greatest cord-cutting losses in the survey, accounting for almost 19% of the lost subscribers. DirecTV followed closely behind, accounting for over 17% of the lost subs. And Comcast's Xfinity service suffered the third worst loss, accounting for 15% of the total.
In one other notable finding, the CableTV.com study revealed that mobile TV apps are proving more and more popular. Some four-fifths of survey respondents (80%) said they now use their provider's mobile app at least some of the time.
"These results are interesting because they seem to imply that TV customers no longer rely on cable providers' TV boxes and DVRs," the study's authors write. "It's easy to see why, with smart TVs running these apps on their own and DVR service moving from hard disks to the fluffy cloud."
But stationary devices like smart TVs, set-top boxes and DVRs do still account for the largest share of actual viewing. Nearly three-fifths of respondents (58%) said they rely on such devices for TV viewing, while the rest rely on such mobile devices as laptops, tablets and smartphones.
— Alan Breznick, Cable/Video Practice Leader, Light Reading