Nielsen is claiming cord-cutting is nothing more than a myth, despite growing evidence people are increasingly choosing free online video options over expensive cable subscriptions. I think the research firm is wrong, and it will proved so over the next few years.
Cutting The Cord
Cutting the cord is essentially the act of canceling your cable TV subscription in an effort to save money. And with the average cable bill coming to more than $100 in the U.S., canceling it is guaranteed to save money.
People who cut the cord are increasingly turning to online video to fill that new void in their life. And one-in-eight people are expected to either eliminate or scale back their TV services during 2010. Which would equate to more than 10 million households.
Nielsen Has Doubts
The research company Nielsen doubts these figures, and has data to back up its claims in an article titled ‘Busting The Cord-Cutting Myth’.
Nielsen claims that the number of households signing up for both broadband and cable service together has increased massively over the past two years, especially compared to the number of households just signing up for broadband.
The company also claims the shift to online video is limited to certain demographics, with young people, college graduates, and lower-to-middle income households dominating the cord-cutters.
A Growing Trend
OK, so I also think these numbers are a little high, but as it includes people scaling back rather than cutting the cord completely, they’re believable. And more tellingly, they show a trend just now beginning to form.
Maybe cord-cutting isn’t yet sweeping the world, but there are definite signs it is about to. The number of people watching online video is growing year-on-year, and as those number increase, TV networks are responding.
As can be seen by ABC’s increasing of its number of online ads, broadcast TV is serious about the Web; it’s just a case of getting all the elements in place so that the viewers tune in, and the company makes some kind of profit, whether via paid options (Hulu) or advertising.
As more and more premium content is licensed for the Web, more and more people will cut the cord. I firmly believe that is the case, and I think the data will show such a pattern emerging over the next few years.
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