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Summary:

While cable operators and networks continue to downplay the effect of cord cutting, in Deloitte’s State of the Media Democracy survey, the firm reports that 9 percent of respondents have already canceled their cable subscriptions, with another 11 percent saying they are considering doing so.

cable cut

Deloitte just released its sixth annual State of the Media Democracy survey, which (among other things) asks U.S. respondents how they get access to their content in a world full of new and exciting devices. While operators and networks say they have seen little evidence of cord cutting, Deloitte’s report paints a different picture: Nine percent of respondents have already canceled their cable subscriptions, with another 11 percent saying they are considering doing so.

Not surprisingly, the number of viewers that are considering canceling skews higher the younger the respondents are: Nineteen percent of “leading Millennials” — those aged 23 to 28 — said they were considering canceling cable, with 13 percent of Gen Xers saying they were thinking about doing so. Of baby boomers, only 7 percent said they would consider cutting the cord, and older respondents were even less likely to do so, at just 5 percent.

The findings come as a greater number of viewers are catching on to free and subscription-based video services available online and streaming to their TVs and other devices. Twenty-two percent of respondents said they had watched their favorite TV show on a free online video source, and 21 percent said they had viewed that show on its own video site. The good news for networks is that those views are increasingly coming from legitimate sources: That compares to 15 percent who watched on a video sharing site or 4 percent who watched on a peer-to-peer network.

Viewers are also becoming more comfortable with watching TV shows on other devices: Nine percent watched shows on a gaming console, compared to 6 percent a year earlier. Smartphone viewing — up to 6 percent from 5 percent — and tablet viewing — 3 percent vs. 2 percent — also increased.

With movies, viewers are even more connected, according to the survey. Deloitte reports that 42 percent of users had streamed a movie in 2011, which was up from 32 percent a year earlier. Twenty-five percent did so as part of a paid subscription like Netflix or Amazon Prime Instant Videos. That’s significantly higher than those who streamed as part of a onetime purchase, which 9 percent of viewers did.

While Deloitte makes the point that greater accessibility ultimately means more people accessing more content, it also means more people are realizing there are more choices for content outside the traditional cable model. As that happens, we expect even more to consider cutting the cord and finding their content elsewhere.

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  1. Another question? What percent never had it?

  2. I cancelled Dish in November. I don’t watch a lot of actual TV online, but watch a lot of other stuff like the TWiT Network and Cnet. For ACTUAL TV, I put up a big roof antenna, get a lot of good, HD channels for free. Neither my 18 year old son or I miss Dish at all.

    1. I traded my cable bill for an HD antenna last summer and discovered that I prefer paying nothing to watch mediocre TV.

  3. These are interesting and challenging times for cable and telcos, need to reinvent themselves to stay competitive.

    1. They “stay competitive” by paying local governments to allow them to monopolize towns and cities so regardless of the medium, you are still paying them for content. The problem is now that people are able to pay less to get more and they don’t like it. Hence things like bandwidth caps sprout up to recoup the losses from one medium to the other.

  4. Why don’t a New Start-up do a A La Carte Channel Subscription? I mean Let’s say you charge $1 A channel, just for 1 channel they would get what $75-200 million a channel! Otherwise they will die!

    1. Because the channels that you and everybody else watches cost a lot more than one dollar. The junk channels nobody ever watches actually pay the cable company to be carried. If those were made ala carte the cable guys would lose that payment.

      1. If an ala carte option were to become available, how much would you guesstimate a channel would cost, on average?

      2. Bullcrap. All these channels have advertising, and the more viewers they have the higher ad rates they can charge.

    2. Actually I think your right on here. The market will eventually determine the price though. Consider the apps on your iPhone. Now imagine you had an “app” for ESPN, one for MTV, etc. That’s my theory of what the TV of the future might look like. One giant iPhone.
      http://cordcutterguide.com/

  5. Cut the cord 2 years ago and get everything I need through the combination of www, Roku and Netflix. And yes I admit sometimes I watch Sports in my local bar around the corner.
    For the statistic fans: I’m above 40, live in California and saved over $2500 by doing this :-)

  6. So according to Deloitte, about 9 million people have canceled cable. According to the cable companies — which are required to state factually their sub counts on SEC filings — the numbers are far lower. Hmm, who should we believe?

    Ryan, you should not have just reported their survey without getting a summary of the industry stats….

    1. The numbers don’t match because cable companies are manipulating the actual subscriber numbers. Here is how. I have Comcast and when I moved (two doors down the hall in an apartment building) i wanted to go with internet only and cancel my cable completely and Comcast gave me this choice: 1. Bundle basic cable with your internet for a “discount”. $60 for internet $15 for basic cable minus the $10 discount for bundling. So $65/mo total- paying an extra $5/mo for basic cable i wont use. 2. Get only internet for $60/mo BUT you have to pay a $100 disconnection fee.

      So what Comcast is doing it artificially keeping their subscriber numbers higher by strong arming their customers into keeping cable by charging ridiculous fees to disconnect it- making it cheaper to keep the bare minimum CATV connection.

      1. This is exactly right! In addition to that they are killing competition in the rental unit space. Even when its against the law to do so (as in Maryland.) I cant get an alternate ISP in the rental complex I live in and no one does anything about it!

      2. Still doesn’t jibe, sorry. You are strong-armed into keeping TV but you tell Deloitte you dropped it? No. Sorry. And in the meantime, Comcast’s cash flow… and DirecTV’s… and Dish’s… are all just fine… So… no…

      3. Correct, I tried this exactly. And there is 0 good competition where I live…

      4. In addition to the methods mentioned above to keep subs (for reporting/accounting purposes only, for the most part), TV providers are always acquiring new subs. All of the subscribers that are switching between TV providers each year because they no longer get the new customer price and all of the younger people who have never had pay TV service offset the cord cutters. The Deloitte article does not take this into account. So, the numbers reported by both, the article and TV providers, are potentially correct.

  7. Cutting the cable has minimal effect on the cable companies bottom line. Most of these people are hanging on to the cable companies as their ISPs and the cable companies make far more money by over charging for internet access than television viewing. I am a perfect example. I have only one high speed option, Comcast. I can’t even get DSL. The way Comcast does their pricing structure it is $5 cheaper a month to keep “Broadcast Only” cable channels and their internet service than their Intenet service alone. So technically I have not “cut the cable” but I only get 22 channels and it is not used.

  8. We cut the cord though we didn’t set out to. We simply realized one day that it had been Weeks since the tv had been on anything other than the roku. We honestly haven’t noticed the difference. You just get so much more from online content. Price aside… Yes it is cheaper, but I would use it even if it cost more.

  9. While this likely is directionally correct, the rate of 9% disconnection is well above the typical cable company’s reported 3% annual customer loss. And, the cable 3% figure includes all reasons for dropping cable, including switching to satellite and disconnected for non-payment. So, while Deloitte’s comments could be detecting a pattern, their 9% figure appears to be wildly high.

  10. You can build an HDTV antenna from parts that you probably already have at home. Check out diytvantennas.com

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