Study: Most Cord-Cutters May Be OTA 'Opt-Ins'
Move could be more about migration to broadcast than online viewing, but jury is still out, says GfK researcher
By John Eggerton -- Broadcasting & Cable, 6/18/2012 3:01:26 PM
That is 17.8% of all TV homes, compared with a consistent 14%-15% over-the-air-only percentage for each year of the study since 2008, according to GfK.
Those broadcast-only homes continue to skew lower-income and minority, but also younger households, the study found. And although cord-cutting has been popularly tied to migration from pay TV to online video viewing, GfK media researcher David Tice, in a blog about the data, confesses up front to be a cord-cutter skeptic, at least to the argument that the flight is from pay TV video to online video.
He says the research shows that over 70% of those who have cancelled pay TV service said it was due to cost-cutting, with cord-cutting because of online alternatives cited by less than 20%.
Tice is not saying that online video options are not an important part of the equation, but said their data does not support suggesting it is a primary driver of cord-cutting.
"So, if people without pay TV aren't necessarily flocking online, what are they doing?" he asks. "With the completion of the digital TV (DTV) transition, homes now have access to an enhanced digital broadcast signal providing much better video and audio quality," Tice blogged. "Another benefit of digital broadcasting is that homes also have over-the-air access to numerous digital side channels, offering a variety of programming in addition to the main broadcast channels."
That is an argument broadcasters have been making for wanting to hold onto their channels in the face of government pressure to give them up for auction.
"Obviously this demonstrates that, contrary to conventional wisdom, over-the-air TV viewership is growing, not declining," said National Association of Broadcasters spokesman Dennis Wharton. "That shouldn't surprise anyone given the pay TV cord-cutting phenomenon. This demonstrates that tomorrow's world will be both broadcasting and broadband and that local TV stations have an exceedingly bright future."
NAB purchased the annual study, which GfK sells to a number of clients, said Wharton, but it did not commission it. Tice confirmed that they supply the report to a number of clients.
Tice says the answer to why the cord is being cut may have to wait until the economy picks up, if it does. "Then we'll see if people maintain their broadcast-only status," he says. "That's when I'll decide if I'm a convert to classifying homes as â€˜cord-cutters,'" or, he adds, "maybe some new term like â€˜cost-cutters,' or even â€˜OTA [Over-the-air TV] opt-ins.'"
The online study is of 3,200 households, with a margin of error of 1.5, plus or minus, with 95% confidence. Although the poll is online, it does not self-seclect for online-only households. Instead, it selects a cross-section of the population and those that do not have online service are given a computer and dial-up for purposes of taking the survey.
"We make sure the sample is representative of everyone in the country," said Tice.
If a company wants you to buy their service, they will market to you endlessly. If you are a "base-level" customer, that company will market additional services to you.
People are not advertised to "to not buy things". So cord-cutting is a slow movement, and will always be a slow movement. People have to realize on their own that what they are paying for is not worth what they are paying.
If pay-tv subscriptions dip to under 75% of households, maybe the industry will change and start offering a la carte.
And, no, a la carte doesn't not suggest a flat fee where all the channel prices are equal, it means channels are priced in relation to their value.
FrankM - 6/20/2012 7:15:20 PM EDT
steve - 6/18/2012 7:27:12 PM EDT
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