- Americans Are Cord Cutting In Record Numbers—And It’s Not Slowing Down Anytime Soon
- Know The Difference Between What Each Service Offers
- Consider Your Internet Speed
- How Many Different Devices Will You Stream On?
- Be Careful Not To Oversubscribe
- How Cable Companies Are Adjusting
- You May Be Able To Reduce Your Cable TV Bill Today
- Cord-Cutter Segment Accelerates During Stay-at-Home Summer
- Learning from Streaming
- Growing Even Before the Pandemic
- Cord-Cutting Becomes the Norm
- Why OTT is a Perfect Extension of Traditional TV
- What is OTT? What is Traditional TV?
- Transition from Traditional TV to OTT
- Pushing the Growth of OTT
- Who Are Cord Cutters?
- Benefits of OTT
Americans Are Cord Cutting In Record Numbers—And It’s Not Slowing Down Anytime Soon
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If you’re thinking about quitting cable and signing up for a streaming service instead, you’re not alone. According to a Sept. 2020 survey by market research firm eMarketer, traditional cable TV will lose over 6 million U.S. subscriber households in 2020 who make the switch to a streaming video platform.
Swapping the traditional cable box for a video streaming service, better known as cord-cutting, has been gaining momentum over the past decade, as more and more companies enter the market offering a less expensive and on-demand viewing experience tailored to customers’ preferences.
Now, with most people stuck at home during the pandemic and also ly looking for ways to cut costs, the trend is accelerating.
If you are thinking about becoming a cord cutter, here’s what you need to consider before making the change.
Know The Difference Between What Each Service Offers
Moving to a new TV experience can be stressful, especially if you’re not tech savvy. Consider what you spend the most time watching and look to find a service that offers the same programming.
Tailored streaming services can give consumers an alternative to cable TV packages, where consumers often pay for hundreds of channels that largely go unwatched.Even if you enjoy a variety of genres, there is ly a platform that aligns with your preferences.
If you want to give streaming a try before making the switch, many of the companies, Hulu and Sling, offer free trials giving you a chance to see if it will work for your viewing habits. However, many services require that you enter a payment method to initiate a free trial—and once that free trial is up, and if you don’t cancel in time, your payment method will be charged.
|Free trial available?||Not available||Yes, but some plans have limited content options during free trial||Not available||Yes, time period varies and you need to enter a payment method||Yes, for three days. You’ll need to enter a payment method|
|Content/features available||Original content, 4k picture quality, parental controls, downloadable content and ability to stream on multiple screens simultaneously.||Network programming (i.e. CBS, NBC, Fox), Live TV, supported on multiple devices, add-on premium programming (i.e. Starz, HBO, Showtime) and ability to be packaged with Disney+ and ESPN+||Programming from Disney, Marvel, Pixar and National Geographic, available to be streaming on multiple devices||Unlimited cloud DVR to watch your favorite shows offline, live TV programming, sports networks (NBA TV, MLB Network, NFL Network), and up to three users can stream simultaneously,||A la carte pricing and packages to curate your favorite programming, up to four people can stream simultaneously and local channels are free when you pair with an HD antenna.|
|Cost per month||$8.99, $13.99 or $17.99||$5.99 or $11.99 without live TV, $54.99 or $60.99 with live TV||$6.99Can be bundled with Hulu and ESPN+ for $12.99||$64.99||Starts at $30, increases with different packages and add-ons|
|Who it best serves||People Those who enjoy a mix of Netflix original and cable TV programming but don’t need live TV||People who want network programming, live TV options and a variety of pricing options||Families with kids||Families with different entertainment preferences, and sports fans||People who want to customize what channels they want|
Consider Your Internet Speed
High-speed internet is a necessity for a seamless streaming experience. For Americans living in areas without high-speed internet, cord cutting may come with a few hurdles.
Fifteen percent of Americans do not have access to high-speed internet ( >25mbps) according to the FCC. Depending on where you live and your service provider, interest speeds that can support streaming may either be unavailable or more expensive.
You can check what providers and speed are available in your area with Inyourarea.com.
The recommended internet speed for streaming is at least 18 megabits per second (Mbps). If you are unsure of your internet speed, you can use free tools Fast.com to measure your current internet speed.
If your speed falls short, give your internet provider a call to see if you can upgrade to a faster service.
If that option doesn’t apply, there may be alternative internet providers in your area you can switch to.
However, faster internet speeds come at a cost. The average internet bill is around $60, less taxes, installation fees and needed equipment. This could wipe out any savings you get by canceling cable.
If saving money is your end goal, evaluate your monthly cable bill against the potential costs of cord cutting. Those costs include the streaming services’ monthly costs, purchasing any physical products required to stream to your TV, such as an Amazon Fire Stick or Apple TV and any potential hike in internet costs.
How Many Different Devices Will You Stream On?
If you live in a house where multiple people use the internet at once, you will need even faster internet speeds to accommodate the demand. Also, you will ly need to pay for upgraded streaming services if your household s to watch different programming simultaneously.
For example, Hulu has four different packages to choose from. All of the packages allow for up to two people to watch different shows simultaneously.
However, if you want the ability to watch on unlimited screens, Hulu requires you to upgrade to a more expensive package, which starts at $54.99 per month, plus pay a $9.99 monthly unlimited screen surcharge.
So for just Hulu for your household, your monthly bill will be about $65 a month—which may not feel a significant savings from your cable bill.
Be Careful Not To Oversubscribe
With Americans now subscribing to an average of four platforms, it can be difficult to keep track of your subscriptions. Consider using the same payment method for all of your streaming services so they all appear on the same monthly bill. This can help you identify any overlapping areas so you aren’t spending needlessly.
Cutting the cord doesn’t automatically equate to saving money. Consider four popular streaming platforms Netflix, Premium, Hulu and Disney+. When you add up their mid-tier monthly subscription prices, it totals about $44 per month. However, that doesn’t include add-on packages including sports packages or live TV access, which can significantly boost the costs.
How Cable Companies Are Adjusting
In an unfortunate counter-move to losing thousands of customers, cable companies are raising prices to replace lost revenue.
In January, Comcast announced during its earnings call they lost over 700,000 cable subscribers in 2019 — 3.2% of its customer base. This problem is not unique to Comcast.
In 2019, DirecTV, Mediacom, Verizon, Dish and Charter, all reported losses in cable TV customers.
In an interview with CNBC in January, Brian Roberts, chief executive officer of Comcast, stated that Comcast is shifting to a “broadband-centric cable company”.
While Comcast lost cable customers, they added 1 million broadband internet customers in 2019.
Roberts also said a large part of their customer base is internet only, shifting away from standard bundle packages that included products internet access, cable and home phone.
You May Be Able To Reduce Your Cable TV Bill Today
If you are a current cable TV customer, you may have negotiating power when it comes to your bill. If you are unsure if cord cutting is best for you, but are unhappy with the current price you are paying for cable TV, give your provider a call. Explain that you may be looking into alternative options away from cable TV, and you want to see if there are ways to reduce your cable bill.
For example, to retain consumers who may be tempted by streaming options, the cable provider Comcast launched their own streaming platform, Peacock.
Owned and run by Comcast’s TV and internet subsidiary Xfinity, Peacock is curated with NBC programming available to both Comcast and non Comcast customers.
Non-Comcast customers have access to a free version, but to receive live sports without any ads will cost $4.99 or $9.99 per month, depending on which package you select.
However, if you are a customer of Comcast’s subsidiary companies (COX or Xfinity), you may get the service for free or at a discount. This is in an effort to keep consumers engaged with Comcast, as more customers cancel their cable TV in favor of competing streaming products.
Cord-Cutter Segment Accelerates During Stay-at-Home Summer
COVID-19 turned Summer 2020 into a purely indoor time. Families around the globe stuck close to home during the normally travel-heavy season. As families looked for ways to stay busy during the unusually quiet time, many turned to television and streaming media to keep kids occupied.
According to an Ipsos study from earlier this year, children aged five and under reportedly consumed 43 percent more streaming media because of the pandemic. That uptick comes as more kids turn to video-on-demand content over the last handful of years.
An Ofcom study found that video-on-demand consumption for U.K. children aged five to 15 more than doubled from 2015 to 2019.
Following up those fast-growing numbers is the massive growth that kids- and family-themed media platform, HappyKids, has seen over the last ten years and 2020.
Learning from Streaming
Future Today's HappyKids platform aims to provide content relevant to kids from zero to six and over demographics.
The COPPA-compliant platform hosts diverse content such as music, rhymes, stories, movies, popular shows, DIY, activity guides and educational.
HappyKids' educational content seems especially crucial for 2020 as children have had to navigate homeschooling during the pandemic.
Speaking with License Global, Vikrant Mathur, co-founder, Future Today, reports that the platform has a strong slate of educational and entertaining content for children. He says that HappyKids is broken down into various sections to highlight educational content for different topics.
“HappyKids has a large library of educational content for kids of all ages,” says Mathur. “Our channel is curated by age so that parents can find the content they are looking for their child's age.
Within each section, we have educational videos, so for example, in zero to two, we have ABC/123 sing-along songs by 'Little Baby Bum,' 'Super Simple Songs' as well as our own production 'Hippy Hoppy.
' For older kids, we have 'Cat in the Hat,' 'Monster Math Fun,' and shows that teach about everything from science to learning about animals or outer space!”
Growing Even Before the Pandemic
HappyKids has recently expanded its content library to include over 55,000 family-friendly movies, TV shows and educational videos.
The platforms expansion comes following a recent partnership with Kidtagious Entertainment and Millimages, bringing more than 525 new episodes of their children's TV programming to the viewers.
The two brands join other content providers on HappyKids such as Lego, Mattel, Nelvana, Moonbug, Super Simple Songs, 9Story Distribution International.
The expanding slate of content has been coupled with continued growth in audience size and watch time. HappyKids' viewership is up 165 percent for the year. Watch time is also up 160 percent in July alone. While the strong growth for the year could seem purely indicative of families spending more time at home, Mathur finds that not all the increases occurred during peak COVID months.
“Only about 40 percent of that growth happened during COVID months,” says adds Mathur. “We have been operating OTT channels for nearly ten years now and have seen consistent growth every single year with users either shaving cords or completely cutting cords to move to streaming platforms. The growth numbers benefited from COVID, but that is not the only reason.”
HappyKids and other streaming media platforms' growth points to increase in cord-cutting families even before the pandemic. While the need to stay-at-home may have accelerated streaming habits for some families, the truth is streaming has been becoming the “new normal” for years.
Cord-Cutting Becomes the Norm
Kagan estimated early last year that over 41 percent of homes in the U.S. would be broadband-only by 2023. That means almost half of all households would ditch traditional TV packages for broadband-only setups.
Kagan's projections may even end up being too low as COVID-19 has expedited cord-cutting for many families looking to save money amid economic uncertainties.
The analyst group reported that the net gain in broadband-only homes for the first half of the year is about 80 percent higher than the previous record set in 2019.
“Given the economic headwinds of the first half, U.S.
households ly were looking to cut back on discretionary spending, including entertainment,” writes Tony Lenoir, senior research analyst, media and communications, Kagan, in a recent blog post.
“At a monthly $100-plus average, traditional multichannel services stand out in budgeting decisions, particularly in the era of streaming video proliferation.”
As platforms such as HappyKids – and newcomers such as HBOMax and Disney+ – hit the streaming media landscape, the switch will become easier for families looking for educational and engaging kid-friendly content without the costly monthly fees.
Why OTT is a Perfect Extension of Traditional TV
In 2020, it is no secret that all things change. This is now as apparent as ever.
While there are some things in today’s society that are currently the prime example of needing to change, how people consume entertainment is not an exception to the rule.
People are changing the way they consume content watching television.
While it may seem Traditional TV and OTT should be bloodthirsty competitors, in reality, they should be paired the best of friends.
What is OTT? What is Traditional TV?
You see those three letter marketing acronyms all over the internet these days (and to be honest it's hard to keep track of them all), but perhaps the most important is known as OTT.
Over-The-Top Television is more commonly understood as ‘streaming television’. When you watch Hulu, or Netflix, or any other internet TV, you are essentially watching OTT.
Traditional Television, also known as Linear TV, is how people would watch TV before streaming services were available.
All shows and channels are pre-programmed and follow a specific schedule.
A huge difference between Linear TV and OTT is with streaming, you get to choose your own programming whenever and wherever you want.
OTT allows you to no longer be limited to what is on at any given time, and gives you the ability to finally watch 20 episodes of The Office in a row.
While OTT Streaming and Traditional TV can be seen as very similar things with few differences, on the marketing side they are greatly different.
Most people are familiar with how Traditional TV works: ad space is bought and sold manually.
This leads to a very long process and an inability to have a quick turnaround time.
On the other hand, OTT ad inventory is usually bought and sold programmatically, meaning that digital ads are bought and sold in an automated manner through designed software.
This opens a whole new world of possibilities in marketing on the big screen!
Transition from Traditional TV to OTT
OTT subscriptions have seen some absolutely astounding growth in the past 10 years. Think about how you used to watch TV in the early 2010’s. You were probably still flipping through channels, while Netflix and Hulu were just getting started.
In 2014, there were 150 million online streaming services subscriptions.
In 2019, this number has grown to over 600 million, a 300% increase! Subscribers are also expected to almost double to 1.1 billion by 2021.
Researchers also found that about 70% of US citizens are subscribed to at least one OTT service, while the average user subscribes to 3.4 different services.
In addition to the average user being subscribed to multiple OTT services, it’s also been reported that the number of households with two or more OTT subscriptions has increased by over 130% in the past five years.
In 2019, 46% of US households subscribe to multiple OTT services, as opposed to 33% in 2017 and 20% in 2014.
This proves that once users try one of the big guns Netflix or Hulu, they are ly to expand on their OTT capabilities and subscribe to other services! It’s getting easier each year to reach a vast number of people using OTT!
You can read more about the evolution and future growth of OTT in our OTT Advertising During The COVID-19 Outbreak!
Pushing the Growth of OTT
Now you may see the numbers from above and think “how it is even possible to achieve that many new users over such a short amount of time?”
The thing to know here is that these new users probably aren’t just discovering television for the first time, they are most ly just adapting with the newly available services.
These people are most commonly referred to as Cord Cutters.
A ‘cord cutter’ is simply someone who figuratively ‘cuts the cord’ on their cable in favor for internet streaming. Between 2019-2020, there were 120.6 million homes in the US that used some kind of TV service (that is about 94% of all homes in the US).
This equates to about 300+ million people in the US. Of these people, about 39.3 million were cord cutters. eMarketer is expecting this number to reach 55.1 million by 2022, following the trend of huge growth.
Who Are Cord Cutters?
According to a study from PwC, 90% of Americans between the ages of 25 and 34 access TV content via the internet.
Also, 87% of surveyed people between the ages of 18-25 are cord cutters, while 78% of people ages 35-49 and 63% of people between the ages 50-59.
This shows that cord cutters aren’t just millennials, they come from all different age ranges.
Families with a parent 35-54 years old with two or three children are a huge part of the cord cutting demographic.
The families claim that cord cutting is a way to save money and watch more content on demand. Cord cutters are value-focused but not averse to paying for entertainment.
Benefits of OTT
While OTT and Traditional TV seem to be very similar in their general definitions, the biggest difference has to be the targeting and tracking capabilities of OTT.
With Traditional TV, you are most ly casting the biggest net you can, and can really only attempt at reaching an ideal audience by choosing what shows or times people are choosing to watch.
These things are still possible with OTT, but your marketing campaign will also be able to target relevant audience segments.
Using advanced demographic information and internet cookies OTT can take advantage of users’ behaviors and serve your ads to the right people at the right time.
At Conduit, we are even able to target people the physical locations they recently visited!
As for tracking and reporting, your Conduit OTT campaign will be able to tell you how many users saw every second of your ad, where your ads have been served, and exactly what streaming service or tv application your audience is using.
If you are already running an ad campaign on Linear TV, there is absolutely no reason to not also be running an OTT campaign!
By only running one or the other, you are severely limiting the potential reach of your campaigns. It is easy to confuse the two and see them as rivals, but in reality, they should come hand-in-hand with each other.
With a huge population of TV watchers moving from Traditional to Streaming, it is getting more and more imperative to open up your capabilities and start targeting every potential customer, instead of just the ones watching one type of television!
We believe OTT is only going to continue to grow as the world switches to a more mobile first society, especially with the roll 5G.
As our internet becomes faster and more reliable, people will find themselves streaming video and movies on their mobile devices, which allows marketers us to place our ads in front of them wherever they go.