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Summary:

Statistics presented by Nielsen tday suggest that fluctuations in cable subscription numbers are due not to cord-cutting, but “cord-swapping,” with consumers switching between different services. However, that still doesn’t explain the rise of broadband-only households among the under-25 set, who are embracing cable-free life.

coax cable

A room full of TV execs heard what they wanted to hear this morning at the 2011 TV Summit; Cheryl Idell, EVP of Media Product Leadership at Nielsen, presented numbers that suggest the cord-cutting phenomenon is not for real.

According to Idell, over the last four years, the number of households signing up for cable or cable-like services have shown consistent growth. While, in Idell’s words, “the pie is getting larger,” any subscriber loss is due not to cord cutting but “cord swapping,” where consumers trade their cable subscriptions for satellite or telco options like AT&T’s U-verse. Meanwhile, the increase in broadband-only households from 2010 to 2011 has only grown from 3.6 percent to 4.4 percent of Americans with televisions.

That’s an average, though; when the numbers are broken down across different age demographics, Nielsen found that in households with people 25 years old or younger, 8.5 percent are cable-free, which is almost twice the national average. Idell characterized this statistic as attributable to the fact that younger people consider cable a “luxury item:” one that might be out of their budget right now, but would become an option once they grew older and could afford that extra $100 a month.

Audience familiarity with devices that enable cord cutting is growing, Nielsen has found. While in 2010 there was a two percent decrease in the number of hours of live TV watched, there was a 20 percent increase in console usage. That increase was greatest with women, primarily for the purpose of streaming content. Netflix usage was pinpointed at about 11 hours of viewing a week, with Hulu half that.

Nielsen has been saying for over six months that cord cutting is a myth, but that’s only by assuming that younger audiences will drop their broadband-only ways down the line — which is a big assumption, especially given how cable bills continue to rise.

Strategy Analytics research from last fall found that cord cutters are young, educated and employed — a phenomenon that our own Janko feels will only continue to grow in 2011.

Check out our most recent episode of Cord Cutters below, featuring the guys from iFanboy.

Picture courtesy of Flickr user mikemol.

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  1. So…people are aware of the devices that allow them to cut the cord, and are not spending money on cable…and this means cord cutting is a myth?

    1+1=…1?

    Nice try, reliant on cable company business entities.

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    1. Yeah, plus the theory that this generation of users who don’t find TV valuable enough to pay for will come to their senses and sign up for cable seems a little flawed.

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      1. A little flawed? You’re being too generous Ryan.

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    2. Being aware of devices does not equal making the leap to cutting the cord. While you don’t have to be a technical genius to use a Roku or similar box it does take more time and effort, which many people would rather not invest.

      Keep in mind too that as people get older and have families, with multiple TVs throughout the house and very diverse interests (kids shows in the family room, live sports in the den, etc.) the complexity of cutting the cord multiplies. I’m pretty adept technically and have cut the cord (now that my kids are grown), but I can understand that families would be reluctant to give up the convenience of cable — even at the outrageous price.

      I’m just saying it’s a fair point that those under 25 will put up with a lot more hassle, and invest a lot more time, than older people with families and other demands.

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      1. I agree that right now their’s a bit of a learning curve from going from cable to OTT but it’s not always going to be that way.

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      2. “Being aware of devices does not equal making the leap to cutting the cord.”

        I disagree. At this point, to know about cord cutting means that you’ve been considering cord cutting. The devices, the language, the necessities are all too tech-heavy for general knowledge sans interest. In a few years, perhaps that statement will apply, but I don’t buy it now.

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  2. The establishment said the same thing when people first started swapping their landlines for cell phones. I may be going out on a limb with this, but I think that trend ended up going mainstream at least a little bit. Nielsen gets huge fees from the TV companies, so they have an incentive to say things that TV execs like.

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  3. Thank you Cheryl Idell for making this 45 year old realize that OTA+internet isn’t for real!

    I better call my cable company and sign-up for overpriced channels I will never watch.

    Anybody have a bridge I can buy?

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  4. bigyaz has it correct.

    Today, to replicate the Pay TV experience customers need to piece together multiple products and services–some not entirely legal as mentioned in the included Cord Cutters video. And while some will find that acceptable, most will not. For this to really take off it needs to become as easy as Pay TV. That’s going to require cooperation from the industry, including the programmers. Before that happens, the programmers will need to have a business model that does not cannibalize the monies they get from the MSOs. I have yet to see anyone publish such a business model.

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    1. Exactly. I’m guessing most of the people posting here are young, single people with an interest in technology who are not huge sports fans.

      Because if you have a family with children and multiple TV sets, and want to be able to watch live sports (beyond the small offerings that come over the air), and if you (and the other members of your family) are not willing/able to deal with the technical requirements and time required, the current cord-cutting technology simply will not meet your needs.

      That’s pretty much what the Nielsen report is saying. Those who accuse them of bias might want to look at their own biases. (And yes, I’m speaking as one who recently cut the cord.)

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      1. The other problem that is not being addressed in any of these “articles” is the reality that right now, we are living in a fantasy land. Netflix is cheap, and Hulu has some pretty good stuff. But that’s about to change.

        IIRC, Netflix grew 30% last quarter, but had a 100% increase in costs. Also, Netflix paid $1B (that’s billion) for Epix. When the Starz deal comes due, they’ll wanting their $1B too. It gets better. The Netflix CDN (L3) is going to get reamed by Comcast over peering costs that will be passed to Netlfix. And if that’s not enough, the FCC net neutrality regulations are going to let the MSOs charge for highband width services (of which Netflix is the largest). The result ? Netflix will have to raise their prices. My guess is we see them at $25 by Christmas.

        And Hulu.They pulled out of their IPO because they don’t have long term contracts for the content they offer. And notice how they are quietly creating their own content ? Why on earth would you try to become a production company unless you were about to run out of content ? Talk about expensive. My guess is that their programming is about to become pretty stale.

        The open question here is Google and Apple.

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  5. I’m a ‘sort of ‘ “cord cutter” –having dumped the sat. TV connection about 3 years ago because it was 1) too expensive for what there was and 2) too many repeats. Then I began wondering about devices which could wi-fi the internet to my television….because I had subscribed to Netflix & no longer wanted to go through the hassle of taking the laptop to the TV whenever I wanted to stream movies or other programming (along with all the disconnecting & reconnecting at both ends.) After looking around on the web at a variety of devices, I settled on the Roku XDS……and have been happy ever since I first connected it.

    I’m very doubtful I will ever again become a satellite TV, cable or phone-line television subscriber…..they all charge way too much for what I am interested in…..which is rather specific & limited to 6-8 channels….usually found only within the more expensive block of channels (& I’m not including any of the premium movie channels.) [I'm hoping sometime that HBO & others offer subscriptions over the internet---but, am not holding my breath.]

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  6. My 50-something mother-in-law just cut the cord last month. She looked at what Time Warner was charging, realized it was too much, and she got rid of it.

    Personally I cut the cord in 1995. I inherited a $80/month cable bill from my roommates, and when we got new subletters, I woke up one day and realized there’s a reason why they’ve got all the money and we’ve got none.

    Anyhow, I find cable to be completely unwatchable. If I want something to entertain my son, most likely it’s a choice between the idiotic Spongebob Squarepants and the offensive teen sitcoms that Disney makes about the problems of rich kids who have clothes closets that are bigger than my house. The weather channel wants me to wait for “local on the 8′s” (yeah right) and there’s no option to opt out of paying for seditious crap like Fox News.

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