Cord Cutters: 6.6 Million Strong and Growing


Are cord cutters pioneers or a main stream trend? Trying to find precise numbers is not an exact science at the moment. One common technical definition of a cord cutter is a household that has a broadband connection but not a multi-channel plan from  cable or satellite. What percent of  households are cord cutters then? Estimates vary from 9% from Deloitte , to a 6.6% (2012 projection) from SNL Kagan, and 4.5% from a Feb 2012 Nielsen study.

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The SNL Kagan percentage translates to a projection of 6.6 million households to cut the cord in 2012. More worrisome for the multi-channel operator is the prediction that this number will continue to grow.

A couple issues complicate these forecasts. One is the recession. Comcast , the biggest cable operator in the country, is often cited as the benchmark. After massive defections in 2011, they recently received some good news that the cancellation trend was decreasing. Comcast cites multiple reasons for the reversal, including new features and better customer service.  But we know some component of cord cutting is economy based. We may have passed the peak of households canceling cable simply because they can’t afford it.

Another complexity is the competitive landscape. I might cancel Comcast and switch to AT&T U-verse to get a sign-up bonus. Or maybe I switched to Netflix plus an antenna! Comcast and others may have this data (i.e. “why did you cancel”) but I have not seen any of it made public.

What can we be certain of? Cord cutting is real. Today’s number is probably roughly in the 5% range, and we are still pioneers at this point. As more content shifts to over the top, becomes easier to access,  and presents competitive line-ups, the number will grow. We will probably hit some tipping point, i.e. some massive shift from cable/satellite over to OTT. Some have predicted that the entire model will eventually implode.  Not sure about that, but it  will be an interesting journey.

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