You will be redirected back to your article in seconds

Cord Cutting Accelerates: Study Finds 25% of U.S. Homes Don’t Have Pay TV Service

Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.”

The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About 17% rely only on broadcast signals for their TV needs, while 6% only use the internet to watch their favorite shows on a TV set, using either a device like a Roku or Apple TV or a Smart TV.

Among households headed up by those in the 18-34 demographic, those numbers are larger: 22% use broadcast-only reception, and 13% get TV on their set via the internet.

There are a few caveats, though. Some of these numbers do not jive with other pay-TV subscriber estimates, which hover around 99 million out of 116 million total U.S. households, and research from Leichtman Research Group has the percentage of non-pay-TV households at 13%. Every firm has its own methodology and panel of people surveyed, which can produce large differences.

The percentages of households relying on broadcast or internet TV and eschewing a traditional pay-TV bundle are increasing at a faster pace, it’s true. That said, “it’s a small slice of homes,” explains David Tice, SVP of GfK’s media and entertainment practice. “It’s gone from being half-a-percent change per year to two percent, in the case of broadcast-only.”

That doesn’t mean there isn’t cause for concern.

“I think everyone started panicking five years ago,” Tice said. Nearly a third of all households subscribe to a streaming TV service, according to GfK’s survey: 31% to Netflix, 16% to Amazon Prime Video, and 7% to Hulu. (There’s some overlap in subscriptions.) That’s why you’ve seen Comcast put serious muscle behind its shiny new X1 system, the cable box that is more computer than clunker; and why satcaster Dish Network created a skinny internet TV bundle (Sling TV).

The difference is an attitude shift, particularly among those ages 35 and older.

“For people in that younger age group, they’ve grown up with streaming; it’s something they expect to be able to do,” Tice said. It was perhaps an inevitability that they would become a generation of cord-nevers, particularly after coming of age in a period of prolonged economic turbulence. That might explain some of GfK’s statistics around household income level and cord-cutting:

  • Cord-cutters: $59,000/year
  • Cord-nevers: $47,000/year
  • Total population: $65,000/year

But what’s more troublesome for the pay TV industry is that older, more affluent households are looking at dropping their pay-TV bundle. “It’s people who can have pay-TV but choose not to,” Tice adds. “It’s more of a lifestyle choice than an economic one.”

On the plus side for many pay-TV companies’ bottom line, the streamers have to get their internet from somewhere — and, for the most part, that means forking over $50 a month to Comcast, Time Warner Cable (soon to be Charter) or Verizon FiOS.

Tice also believes it won’t be too long before we hit a point when all the people who are going to rely on streaming TV have made their choice, and a new status quo is achieved. “Everything plateaus at some level,” he said.

More Biz

  • Kanye West VMAs

    Kanye West and Manager Scooter Braun Part Ways Professionally

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Roc Nation Names Phil McIntyre President

    Roc Nation Names Phil McIntyre President of Management (EXCLUSIVE)

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Darcus Beese

    Darcus Beese of Island Records U.K. to Take Helm at U.S. Label: Sources

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Netflix placeholder

    Netflix Stock Slips After Streamer Announces $1.9 Billion Junk-Bond Offering

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Bill Cosby departs after his sexual

    Bill Cosby Trial: Closing Arguments Paint Two Different Pictures of Disgraced Entertainer

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Merger Mayhem

    Merger Mayhem: Media Companies Scramble to Bulk Up in Order to Survive

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

  • Bruce Springsteen and Patti SmithWorld Premiere

    Bruce Springsteen Joins Patti Smith on Stage at Tribeca 'Horses' Premiere

    Three words haunt the dreams of pay TV executives these days: “Cord-cutting accelerates.” The latest numbers on cord-cutting from research firm GfK might give a few people some sleepless nights. A quarter — yes, a full 25% — of U.S. homes don’t subscribe to a pay-TV service, according to GfK’s 2016 Ownership and Trend Report. About […]

More From Our Brands

Access exclusive content