LAST FALL, JUST BEFORE THE annual onslaught of new television programming was scheduled to air, a few friends and I discussed cutting the cord.
One couple said they were doing it in mid-September. Another said they weren’t going to give up cable altogether, but they were going to trim. The third set, my husband and I, didn’t say anything. We had already shaved to a basic package plus kids’ programming.
Fast-forward a few weeks. The ones who planned to trim, did. They had wanted to switch carriers too, but when they tried, they were seduced by a better deal with their existing provider.
A shocker – the ones who said they were going to cut, actually did. It was inconceivable to the rest of us; one of them was a TV junkie. They had four TV sets in a house where only three people lived. So far they’ve been cable-free for almost nine months and insist they don’t miss it.
In the survey scheme of things, three households is nothing, true. But the anecdotal evidence we all hear is looking like a microcosm of a broader issue. Cablecos and broadcasters, secure now in the notion that consumers need TV like they need food, water and shelter, will soon be sadly disabused.
“Cord cutting is not happening at any scale in Canada,” says Kaan Yigit, president of Solutions Research Group in Toronto, which specializes in cable, wireless, media and digital technology analysis. “Yet anyone who takes comfort in this is a fool.”
According to Yigit, cord cutting is in its embryonic stage, the numbers similar to where the wireless/wireline substitution was about a decade ago. Yes, some people are going without a paid TV subscription, but it’s not mainstream – yet.
Although one-in-ten paid TV subscribers in Canada “seriously” thought about dropping their subs in the past six months, few actually did, adds Yigit, who is close to publishing brand new research on the topic
“When we ask why, we find the fact that TV subscription is a household service is the main reason for its stickiness,” he says. “Unless everybody in the household is in agreement, keeping the service is easier than dropping it. Who wants the wrath of their partner or the kids if a favourite channel all of a sudden disappears along with the subscription? $50 to $60 per month keeps the peace at home.”
Yigit’s findings echo my own informal survey. “I threaten all the time. I get overruled by the big kid in the house,” says one friend. Another says, “If I cut the cord, I’d also have to remove my wedding ring. My husband loves cable more than me. I, on the other hand, watch TV about once a year. Though I confess I watch Daily Show online.”
This is the good news for the industry. But there are storm clouds, too, says Yigit. “About one-in-six households say they downgraded their service in the past year, either by dropping some channels with their existing provider or often by switching from a fuller package to a smaller one of a competitor. Downsizing by switching to a slimmer package has been the trend.”
One thirtysomething colleague just cancelled her cable. She was never home to watch it and the programs she does want to watch are available online. She now uses her TV as a plant stand.
I trimmed my own package a couple of years ago, at the start of the economic downturn. (The uncertain economy is also one of the reasons cord cutting is more advanced in the U.S., according to Yigit.) It wasn’t much of a hardship. My satellite service often goes down when it rains or snows. Living in Toronto, especially this year, that’s a lot.
Continual change in programming schedules has made it easier to give up on shows that could have hooked me. And, it seems that every time I do catch an episode, it’s a rerun – usually one of the few episodes I saw in the first place.
Add to that the dearth of anything other than reality TV in the summer and our household goes on a TV-free diet. Consequently, the TV spends more time watching me than me watching it. We didn’t have to discourage ourselves from watching TV; the TV did it for us.
The same thing is happening for others, too. “I just went from the full meal-deal cable package to the very basic package,” says a single thirtysomething friend. “I rarely watch TV but I thought it would be better to wean myself off then cut it cold turkey, because I do enjoy it from time to time.
However, the recent results of Canada’s largest distributors don’t mirror my admittedly limited survey. For example, Bell’s first-quarter results for this year don’t support the observations. TV revenues (Bell Satellite and Fibe TV) increased by 7.5% to $460 million due to subscriber growth and customer upgrades to higher-priced programming packages. However, total TV subscribers only increased by 7,663 this quarter compared to an increase of 19,889 in the same period last year. At the end of the quarter, there were more than two million TV subscribers, or 3% more than last year.
Most other publicly traded North American carriers have also reported solid results in revenue and subscriber numbers in recent quarters.
Perhaps going TV-less is more of viable for those who are childless or in a 40-and-under demographic? The anecdotal evidence of cord cutting and trimming has been on trend with Yigit’s consumer research, he reports. And, if it is, the situation is worse than the numbers show. People are putting themselves into TV rehab for a variety of reasons. And, they might not be cutting. They might not even be plugging in.
A single friend in her late 20s boasts of being cable-free for two years. Her main reason for falling off the television wagon? She didn’t want to deal with the cable guy.
“[The company] already gave me such a headache trying to get Internet….Then once I went two weeks with out it, I realized how much I enjoyed life without cable,” she says. “…Paying for it really doesn’t seem necessary anymore. Any show you like you can find some way to stream it for free… Also, I can’t really think of anyone in my age group that I know who has cable. We’re in a world where you can get around for free because of the Internet.”
Other twenty- and thirtysomethings of my acquaintance say they just never hooked up in the first place. They either don’t watch much TV—and, growing up, never did – or they watch strictly online. (However, one reversed the trend; she grew up without cable but now that she’s on her own, she’s plugged in and loving it.)
The consumer zeitgeist doesn’t appear to bode well for the traditional television business. Unless the television industry does something to change the mood of the moment among consumers, cable or satellite or telcoTV-free conversions may move faster than any of the experts previously thought.
“Cable is kind of like a drug pusher,” says a married mother of three. “The program packages are built to suck the viewer in. And, there’s always a discount if (insert option here). We just renewed our whole deal because we get to keep the 20% discount and because we bundle… Anyway, I’m too lazy to really force the issue. Maybe next year when our 20% discount is up again.”
Is online video additive or replacing? Right now, it seems to be a little of both.
Next week and for each of the next three we look at what the industry thinks of the phenomenon. Is cord-cutting real? Is OTT video really a replacement for traditional TV (the CRTC thinks maybe so)? What’s going on in other countries?
Questions? Comments? Kudos? Criticism? Let us know at editorial@cartt.ca.
