Comcast dropped a bomb shell on Wall Street and the cable industry the other day, when it reported that it lost 275,000 basic cable subscribers in the most recent quarter, leading us to conclude that the cord cutting phenomenon has finally begun in earnest. But who are these people are that are canceling cable? They’re not the unemployed nobodies some would have you believe.
For its part, Comcast blamed the weak economy, the housing crunch and increased competition from other providers for the subscriber losses. Others have tried to dismiss what looks to be a troubling trend among cable and other pay TV providers, with this week’s money quote coming from Sanford Bernstein analyst and cable apologist Craig Moffett. In a New York Times article on Comcast’s earnings, he basically said not to worry about cord cutters because they’re poor, sad losers:
“Mr. Moffett said the image of the cord-cutter had been that of a ‘cutting-edge technologist’ who preferred to bypass cable to watch programming on computers and on an ever-proliferating array of devices. ‘The reality is it’s someone who’s 40 years old and poor and settling for a dog’s breakfast of Netflix and short-form video.”
As it turns out, Moffett is wrong on all accounts.
Contrary to Mr. Moffett’s statement, the typical cord cutter is young, educated and employed, based on research from Strategy Analytics. The research firm surveyed 2,000 Americans, and found that 13 percent of them intended to cancel their cable subscriptions in the next 12 months. But the profile of those who said they wanted to abandon cable is what’s really interesting.
A majority of those likely to cut the cord (54 percent) are under 40, according to Strategy Analytics, and they are well-educated: A full 97 percent of those surveyed have graduated high school, and more than two-thirds have pursued or are pursuing secondary education. It’s not a lack of income that is driving them to save on cable bills; 91 percent of likely cord cutters are either employed, students or retired, and 57 percent make $50,000 a year or more.
Contrary to Comcast’s reasoning that the poor economy is hitting people in the wallet, forcing them to cut back, the cord cutters in Strategy Analytics’ study weren’t just planning to cancel their cable due to tough times. Instead, the top reason given for canceling cable was poor value for the money they were paying.
As to the claim that cord cutters are settling for a “dog’s breakfast” of Netflix and short-form content online, we hate to burst Mr. Moffett’s bubble, but there are tons of long-form content available via free, over-the-air signals and networks’ sites online. Not just that, but there’s a great selection of web-only content being made by independent creators. Cord cutters aren’t “settling” for a limited amount of video not available on cable; they’re opening their eyes to a vast and growing volume of content that can be found online.
Don’t just take Strategy Analytics’ word for it; we’ve got a spirited discussion going on in our open thread from yesterday, in which a ton of cord cutters and future cord cutters discuss their reasons for canceling their pay TV subscriptions. And, as always, we have our new show, Cord Cutters, where the NewTeeVee staff checks out the latest gadgets for viewing streaming video, talks to people who have cut the cord themselves and reviews great content online that you might not already know about. Take a look:
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