The number of consumers who say they are “extremely likely” to cut the cord on their pay TV service has increased to 3.7% from 1.9% five years ago, according to a new study by Frank N. Magid Associates.
The cord cutting phenomenon has so far been small, but worries it could pick up steam have caused concerns on Wall Street that have contributed to media company stock prices plummeting in recent weeks.
Though these are small absolute numbers, they represent a growing trend by Americans to discontinue their pay TV. Most consumers say they are doing this because they can get plenty of content from “over-the-top” services like Netflix, Hulu and others, as well as content they get from the Internet broadly, including YouTube, according to Magid.
“It still adds up to big bucks for major pay TV companies”, said Mike Vorhaus, president of Magid Advisors. “This is not some sort of 'over the cliff' emergency, but rather a ‘drip-drip-drip’ sort of problem for the Pay TV industry."
Magid said that 20% of American consumers said they never subscribed to a pay TV service and that 61% said they would like to buy a “skinny bundle” of cable channels where they can pick the networks they want and pay a smaller monthly subscription fee.