Black Audiences Increasingly Cutting the Cord

Black audiences are increasingly opting to cut the cord, a new Horowitz study finds.

Though black households were shedding cable at a slower rate as compared to the overall market, Horowitz data shows that over the past four years, MVPD penetration among black households has declined from 88% in 2017 to 61% in 2021 — a 25% decrease. Among black consumers who are cord-cutters, half have cut the cord within the past three years.

In 2018, 69% of black households were “content omnivores,” a term Horowitz coined in 2017 to describe households who are the hungriest for content and therefore pay for traditional MVPD services as well as a variety of streaming services to access all the content they want.

In this year’s study, only one in three (33%) black households are content omnivores; almost four in 10 rely on combinations of streaming services, digital antennas, and/or vMVPD services to access TV content (one in four rely only on traditional MVPD services and do not stream at all).

Income and age play important roles in platform choices, according to Horowitz. Black households with lower incomes are less likely to subscribe to traditional MVPDs, and 80% of black cord-cutters believe that they are saving at least a decent amount after having done so. Older black TV content viewers are more likely to subscribe to MVPD services (65% among those 50-plus) and to use antennas (28% among those 50-plus) than younger black TV content viewers (57% and 12% each, respectively).

Despite shedding the MVPD cord, there is still interest in many of the features of the multichannel experience. For example, 64% of black TV content viewers say that they enjoy flipping through channels, and the study finds that black TV content viewers still highly value live television, local broadcast news, national news and sports content — the mainstays of traditional providers.

Culturally relevant content is also in high demand among black audiences, with 60% of black consumers watching content geared to black audiences at least weekly.

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“Horowitz has long asserted that black consumers are some of the best customers for entertainment content and services,” Adriana Waterston, Horowitz’s chief revenue officer and insights and strategy lead, said in a statement. “These audiences should not be taken for granted. Many companies are late to the game, only now focusing on the black audience in the context of BLM and new diversity mandates. To not be viewed as simply pandering, companies who hope to serve the black audience must make meaningful and sustained investments, not just in programming and marketing, but in community outreach and support, in order to earn this valuable audience’s trust.”

Kagan: Cord-Cutting to Cost U.S. Pay-TV Biz $33.6 Billion in Annual Revenue by 2025

Cord-cutting among pay-TV subscribers is no longer a niche activity. The practice of giving up the traditional cable/satellite/telecom channel bundle for over-the-top video is now expected to strip nearly $33.6 billion in annual revenue from U.S. operators through 2025, according to new data from Kagan.

The research firm contends revenue from cable, satellite and telecoms will decline from $91.1 billion in 2021 to $64.7 billion by 2025 as subscribers jettison service for alternatives such as Netflix, Amazon Prime Video, Disney+, Hulu, Peacock, Paramount+ and HBO Max, among others.

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The changing viewing patterns, only slightly moderated by rising average revenue per unit, are forecast to depress sales, excluding advertising, by 45% from the 2016 peak of more than $116.9 billion.

“While all three major platforms are feeling the impact from the shift, the magnitude of the losses are expected to hit more acutely for satellite (i.e. Dish and Direct Stream) and telco (Verizon, AT&T) revenue subtotals amid waning commitments by major players and relative stability from the large cable providers such as Comcast and Charter,” Kagan wrote in a post.

Roku: Pandemic, Cord-Cutting Driving Streaming Video Consumption

Increased streaming video access to live sports and new-release movies in the COVID era is accelerating over-the-top video consumption in consumer homes, according to new data from Roku.

Citing a survey of 2,852 respondents (ages 18 to 70) in the United States, who watch at least five hours of TV per week via traditional pay-TV (i.e. cable, satellite or telecom service) or a streaming service, Roku found that the ease-of-use, cost-savings, and content quality of TV streaming was shown to have extremely broad, intergenerational appeal among American consumers.

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Roku said 25% of respondents call themselves cord-cutters, and on average pay less than half monthly what traditional pay-TV subscribers do for video content: $49 vs. $121. But cutting the cord doesn’t mean watching less. On average, Roku found cord-cutters spend three more hours per week streaming video than traditional pay-TV viewers spend watching content: 22 hours compared with 19 hours.

Roku found that not just young people are using streaming services to stay in the loop on social media. Social currency is also a reason that baby boomers (born between 1946 and 1964) choose streaming: 54% chose TV streaming compared with 25% who said they would turn to traditional pay-TV.

And streaming services are continuing to expand their audiences overall. While TV streaming is nearly universal among younger generations — 98% of Gen Z (1990s to early 2010s) and 95% of millennials (1981 to 1996) — the majority of boomers are streaming too.

Among boomer respondents, 71% of whom stream, nearly 25% cut the cord in the past year — and are just as likely as younger generations to be cord cutters (25% vs. 23%). Another 51% added more streaming subscriptions; 90% said TV streaming devices are easy to use.

Not so long ago, the only way sports fans could watch live sports was on cable, or at a venue. Now 42% of respondents said they watch sports via TV streaming versus 62% who watch via traditional pay-TV.

“Amid a year of uncertainty, this survey puts data behind what we at Roku have believed since our founding in 2002: All TV will be streamed,” Anthony Wood, founder/CEO of Roku, said in a statement. “These results show that TV streaming has passed a tipping point. Even more exciting, it’s bringing more people together, starting new conversations, and giving viewers of every generation more of the content they love, while also making it more accessible. TV streaming is here to stay.”

Survey: Nearly Half of American TV Viewers Have Already Cut the Cord

Non-pay-TV consumers are set to become the predominant TV consumer in the next year, according to new data from The Trade Desk. Based on answers of more than 4,000 adult respondents from April 27 to May 5, the fourth “Future of TV” survey found that 47% of American TV viewers are already cordless, while 44% of Americans with cable TV anticipate pulling back or cutting service in the coming year.

Cord-cutting accelerated as programming such as live sports became unpredictable through the COVID-19 pandemic and consumers’ appetite for on-demand content grew. The shift to connected TV appears to be solidifying, with the majority of TV viewers aged 18 to 34 and 35 to 54 (60% and 53%, respectively) already without cable. These age groups are among the most coveted by advertisers.

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Streaming skyrocketed in popularity — even for sports viewing, which has traditionally been a driver for linear TV viewing. According to the survey, only 19% of TV viewers are returning to their pre-pandemic sports viewing habits. Meanwhile, 44% who watch sports are choosing a primary viewing source outside of linear TV. That number increases to 65% among sports viewers aged 18 to 34.

“We are entering a new TV normal, where new streaming viewing models sit side by side with traditional TV formats,” Tim Sims, chief revenue officer of The Trade Desk, said in a statement.

Sims said the shift to Internet-connected TV presents an opportunity for marketers to reach streaming TV viewers with more precision and accuracy because they can apply data to marketing campaigns in a way that’s not possible with linear.

“It provides incremental reach that’s an important element of a comprehensive TV ad campaign,” Sims said.

The research also indicates the current TV content arms race cannot be financially sustained for providers or consumers without relevant advertising, and consumers are becoming more receptive to advertising even on CTV.

According to the study, more U.S. TV viewers report watching streaming content with ads (44%) than without ads (33%). Indeed, nearly two-thirds of U.S. TV viewers (64%) don’t want to spend more than $30 in total per month on streaming services, making free or lower-cost ad-supported services more attractive to consumers.

A separate survey of 150 advertisers found that 92% of marketers believe that CTV is as good as, or outperforms, linear-TV advertising. New advertising budgets support this view, with 45% of marketers increasing their CTV budgets over the last year. Among those who shifted budgets to CTV, 91% said they will maintain those shifts or increase investments in CTV.

These benefits are particularly apparent for marketers when thinking about TV event advertising. In fact, 74% said that buying CTV ads in conjunction with live sports events can be more cost effective and impactful than classic sports sponsorships.

“Today’s marketers are under a lot of pressure to prove the ROI of every advertising dollar, and that has encouraged marketers to think about how CTV can provide incremental value as part of a TV ad campaign,” Sims said. “Advertisers want better cross channel measurement and the ability to tie that measurement to actual business outcomes. That means CTV is becoming an increasingly important component of most contemporary marketing plans.”

Report: Pay-TV Subs Spend as Much on SVOD as Cord-Cutters

A longtime marketing advantage of over-the-top video was its cost-effectiveness to traditional pay-TV bundle. As SVOD services proliferate, the combined cost of services is narrowing the pay-TV divide, suggesting relative cost savings moot. Notably, new data from Cordcutting.com finds that pay-TV subs are spending as much on SVOD as cord-cutters — around $45 monthly — while maintaining linear-TV access.

Thanks to comparable streaming budgets, cord cutting savings remain clear. Pay-TV subscribers spend an average of $168 a month on TV entertainment and broadband, roughly double the cord-cutter average of $86 a month.

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Notably, cable and satellite TV customers subscribe to an average of 4.4 streaming services, which is greater than the 4.1 average for cord-cutters. Indeed, pay-TV subs spend an average of $45 a month on streaming, which is greater than the $37 a month spent by cord-cutters.

“Our findings suggest that convenience and other non-financial factors in streaming aren’t as important to the cord-cutting trend as might be imagined,” read the report. “But, conversely, the high levels of streaming spending among cord-havers suggest that convenience, original content, and other factors are more important — not to the narrow world of cord-cutting, but to the broader world of TV entertainment.”

Analyst: Nearly 40% of Pay-TV Subs to Drop Service by 2025

Cord-cutting among pay-TV households is increasing. So much so, one research firm is revising its forecasts. New data from The Diffusion Group finds that 36% of pay-TV subscribers will drop service by 2025 — up 9.5% from the previous five-year period.

TDG had previously estimated that by the end of 2020, pay-TV households in the U.S. would range from 83.5 million to 87 million. Instead, pay-TV households fell to 81 million at the end of last year.

Last year, TDG again recalculated pay-TV households going forward ranging from 75.7 million households to 76.7 million. Through six months of the year, pay-TV households held around 77 million.

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The same trends apply to online TV, which includes services such as Sling TV, AT&T TV, Philo, YouTube TV and Fubo, among others. TDG had projected online TV households would reach upwards of 14 million by 2019. Instead, there were less than 10 million (9.8 million) households subscribing to online TV through June 30 this year.

“Our 2017 forecasts underestimated the growth in cord-cutting and overestimated the uptake of [online TV],” Michael Greeson, president and principal Analyst at TDG, said in a statement. “Beginning in 2007, our five-year forecasts have been eerily accurate, but it was obvious that 2017 forecasts needed to be tweaked. We were within 5%, but at two years out versus five.”

According to TDG, in 2015, 16% of broadband households were likely to cancel their pay-TV service, with 7% moderately likely or definitely doing so. In 2020, 25% of broadband households are likely to drop service (up 56% from 2015), with 13% definitely doing so (up 86% from 2015).

As a result, TDG believes 14 million U.S. broadband households are more than likely to drop pay-TV going forward, with about half of that number doing so this year.

Ending a Relationship

It had been a long time coming.

Cable TV had been a big part of our lives for decades, a constant entertainment companion, but being together so much during the pandemic took a toll on the relationship. Suddenly, those ever-expanding commercial breaks seemed endless after watching ad-free streaming services such as Netflix, Disney+ and Amazon Prime. Even Hulu, which we watched with ads, served up a more palatable break — and conveniently offered a little countdown to tell us when it would be over.

We picked up YouTube TV for live programming, and that was it. The cable relationship was over. We cut the cord.

Apparently, we are not alone. A Roku survey found one in three U.S. households are cord cutters, and many have decided to make the change in recent months, citing the pandemic, the abundance of free AVOD services, and lack of live sports, among other factors.

Aside from the learning curve on how to work the remote to get to the channel or program I want, it’s been a smooth divorce. Kicking cable out also gave us more space. We gained some shelves by ditching the boxes.

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So far, I don’t miss the old companion. I haven’t found a program or channel that I previously had on cable that I can’t find or approximate on our new streaming combo. Sure, I don’t have the convenient clock on the box to see the time. It takes a little more effort to figure out what I want to watch among all the new choices, but, honestly, I don’t miss cable.

It was the growing relationship with our SVOD services, the new-and-improved version of live TV on YouTube TV and the cable bill’s increasing drain on our finances that drew us away.

When we announced the decision to end it, my daughters looked up from their phones and sarcastically said, “Oh, no! We watch so much cable.”

Goodbye old friend.

COVID-19 a Push to Cut the Cord

During the pandemic, consumers are sitting at home looking for more visual entertainment than ever before — and evaluating their options. Happily, the disc has gotten a lift as consumers realize the value of the stalwart format, while digital transactional retailers have gained in part by offering premium VOD titles that bypassed or left theaters early.

But, in addition to theaters, one entertainment option that may suffer from COVID-19 is traditional cable, satellite or telco pay-TV. A study from TDG Research found that as virtual MVPD services re-create the offerings of traditional pay-TV, consumers are increasingly seeing less of a need for it. “Most OTT pay-TV services now provide a full complement of both broadcast and cable channels” said analyst Michael Greeson.

Indeed, I am finding it increasingly annoying to sit through commercials on cable that last longer than ads on any AVOD offering and don’t include that convenient countdown to tell you when the torture will end. After scrolling through the numerous cable channels and finding absolutely nothing I want to watch, I am jumping to smart-TV options more and more. The family wants to cut the cord, and the time may be right.

As TDG noted, vMVPD leaders Hulu Live TV and YouTube TV offer the four major broadcast networks, channels that previously helped tie consumers to traditional pay-TV.

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It’s ultimately a flight to quality and value, the same things that have bolstered the transactional home entertainment business since its beginning.

Cable TV Could Lose $1 Billion in Hidden Fees Revenue

Hidden fees on the typical pay-TV bill are the secret sauce that pad cable operators’ bottom line and state and local government coffers.

The average cable bill includes $37.11 worth of added monthly fees (excluding $13.28 in taxes) that aren’t part of the advertised package price, according to new data from KilltheCableBill.com. A separate report from Decision Data found the average domestic cable bill is about $217 monthly.

With nearly 600,000 video subs canceling service in the first quarter (ended March 31), the report contends pay-TV operators lost more than $22 million in revenue per month, which could result in $265 million for the year if cord-cutting trends continue. That revenue loss could skyrocket to $1.5 billion if video sub losses balloon.

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At the same time, the surge in over-the-top video platforms charging flat monthly fees of $15 or less continues. Netflix alone added more than 15 million subscribers in the quarter.

“The fact is that Q1 was devastating to cable companies, and I think that we’ll see when Q2 stats come out and a full quarter of quarantine has finished that the [coronavirus] pandemic just might be the final straw for cable TV as we know it,” analyst William Parker wrote in the report.

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Sling TV Turning 5 Years Old

It was five years ago at CES that Dish Network announced it would soon launch an upstart $20 monthly online TV service called Sling TV. Today, the service, which launched in February 2015, costs $25 to $30 and touts an industry-leading subscriber base of 2.69 million.

A combo package costs $40, with add-on programming available at $5 to $10 extra per month.

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Sling TV was the first service to offer standalone ad-supported access to ESPN, which at that time was one of the pillars of the traditional pay-TV bundle. Dish had acquired the groundbreaking online rights following a protracted carriage dispute with Disney.

The move heralded the launches of Sony’s PlayStation Vue, HBO Now, Spectrum TV Plus, DirecTV Now (AT&T TV Now), Hulu with Live TV, YouTube TV, Philo TV,  and fuboTV, among others.

Consumer Reports recently touted Sling TV among the best standalone streaming services for cord cutters. Sling also launched apps for LG and Samsung TVs, as well as Xbox game systems. “With Dish’s Sling TV, you don’t get individual shows; you get channels,” wrote the publication.

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TechRadar called Sling TV a “cure-all” for the cord-cutting generation, “something that we knew we needed but no company stepped up to make.”

The website lauded Sling TV for its affordability and monthly access.

“Best of all, you won’t have to give up some of the perks cable provided in the last few years like the ability to pause live TV or watch something that aired up to 72 hours ago,” wrote the site.