Credit: MarTech Today
A new survey should make marketers reassess the future of cable TV versus over-the-top (OTT) TV like Netflix and Hulu.
In a survey of 5000 U.S. users, Chicago-based consulting firm Waterstone Management Group found that 59 percent have discontinued cable TV in favor of OTT, and another 29 percent are considering doing so.
“Nearing the end.” Andy Kerns, Creative Director at digital marketing agency Digital Third Coast and the study’s primary researcher, told me via email that the big takeaway is we may “be nearing the end of ‘traditional cable’ as we once knew it.”
Conducted in December, the survey asked one question:
“Someone who ‘cuts the cord’ gives up a traditional cable TV subscription in favor of streaming services like Netflix, Hulu, Amazon Prime, etc. WHAT BEST DESCRIBES YOU?
- I cut the cord 3+ years ago
- I cut the cord 2 years ago
- I cut the cord in 2018
- I plan to cut the cord in 2019
- I’m on the fence
- I don’t plan to cut the cord
- I’ve never had cable”
Kerns said the question’s wording meant that “cord cutting” could include discontinuing basic cable or basic + premium, but it was not meant to include cutting just premium and keeping basic. “If they cut it,” he said, “they cut it all.”
“Ground shift in certain markets.” The results were broken down by 43 states and Idaho topped the list of cord-cutting states, with the survey showing that 72 percent in that state cut the cord, while only 36 percent had done so in the least cord-cutting state, New Jersey. As I questioned those relative state percentages, Kerns responded that, in states with few responses (Idaho only had 66), the “margin of error can climb significantly.”
The 72 percent in Idaho, he acknowledged, is therefore “less reliable than the 59% reported nationwide.”
“We’re trying to resist speculation about why percentages are so much higher in some states,” Kerns added, “but we know from some of our preliminary research before conducting the study that certain regional cable providers have notoriously awful customer service, so there has likely been a ground shift in certain markets.”
Fast-climbing cord-cutting. The main surprise here, he said, is “that cord cutting is climbing as fast as it is,” adding that cable companies haven’t responded well to the competition of quality content from the likes of Amazon Prime, Netflix and Hulu or to pricing competition.
The survey was conducted via Amazon’s Mechanical Turk paid survey platform, which did not indicate the respondents’ ages. Kerns said he believe the actual age range of respondents was “remarkably close” to national averages, although he expects it skews “a bit younger, [more] female and tech savvy.”
The distribution of respondents across states was uneven, with 50 to 250 responses per state. Seven states had fewer than 50 responses, so they were excluded from the results.
Why you should care. While the specific state percentages in this online survey may seem surprising, the basic thrust is that dropping cable subscriptions in favor of OTT programming has become very popular.
And, if 5G high-speed wireless data transmission, delivering speeds up to 10 gigabits/second, takes hold, the need for wired set-top cable boxes could vanish completely, whether or not one continues a subscription. At that point, all TV services would be some form of OTT.
For marketers, this means that the day of OTT may truly be dawning, and cable TV’s day fading. This could fundamentally change how advertisers buy TV program ads and how TV ads are attributed, since they could all become as trackable as, say, website ads.