Why Cord Cutting Is Not Yet Making the Cut

PointRoll Cord Cutting“Cord cutting” is a relatively recent trend where consumers opt to discontinue their traditional cable subscriptions for online streaming services such as Hulu, Netflix, Amazon, etc. It has also been assumed that “cord cutters” have embraced streaming media with open arms because they don’t want to pay expensive cable bills. However, a recent TV Guide study shows that these cord cutters a mere minority of online video viewers.

According to the TV Guide’s panel, the lion’s share (73%) of those who were streaming more TV content said it was because they were catching up on missed episodes. Eight percent said it was because they were cutting back on cable and 10% reported it was because they had canceled their cable altogether. Online news consumption has taken off as well. Aside from sitcoms, more and more people are consuming news through online video and on their mobile devices. According to a recent eMarketer survey, 39% of respondents said they read online news every day and only 25% said they watched cable TV news every day. The survey also showed that 45% of respondents said they watched short video news clips online and 19% watched through streaming live video. Additionally, forty two percent of those who own smartphones say that their mobile device is their main news source.

Simply put, in today’s world of electronics and technology, consumers use devices and services in strategic ways. All devices are used for their specific functionalities. That being said, video and mobile are taking large strides toward being dominant players in these digital categories.

  • The large screen HD TV is now more about entertainment and less about news. Live sports are a huge part of entertainment. Sports programs like Sunday night football and college football still tend to draw a live audience and therefore tend to be commonly viewed on the flat screen TVs in living rooms as opposed to mobile devices.
  • Smartphones, in addition to the usual phone and email, have evolved into the go-to medium for news rather than waiting for the 6pm news broadcast or even 24 hour cable news channels. Apps are also becoming a big player with capabilities like push notifications to provide breaking news alerts to keep consumers informed as news happens.
  • Tablets or laptops work just fine for watching shows like CSI or Fringe. Users either seek out shows they have missed and “binge watch” by viewing three or more episodes in one sitting either through paid services such as Netflix, Amazon, iTunes, Hulu, etc. or free ad supported services like Crackle.

Users who are looking to “cut the cord” will look for the following two factors to meet expectations while watching live sporting events.

  1. Usability: It has to be simple. The experience of surfing channels needs to be as seamless as the experience offered by the cable providers and on top of that, all the major content providers that provide coverage of live sports need to be accessible. Although Intel had trouble getting the major media networks to adopt, the announcement  itself is a sign of things to come.
  2. Quality: Quality is not something that can be underestimated and consumers will not exercise patience for “buffering content” pauses or low resolution content that shows even more poorly on their HDTVs.  A combination of better content compression and increased download speed will need to go into effect to address this challenge.

With so many innovations occurring daily, I have no doubt that these problems will be addressed. The day will come when live TV will go digital with matched usability and quality. But until then, one thing will be for sure – cord cutting will not hit the masses until that day comes.

About The Author

George Thomas

George Thomas heads up Product Management at PointRoll and has over a decade of experience in the digital advertising industry. He oversees the strategic vision and a team of Product Managers who cover key initiatives that spans formats, distribution, measurement and compliance. Earlier in his career, George was product Manager and Director of Technology at 24/7 RealMedia where he was responsible for building sell side adserving technologies. He received his Masters in Computer Science from Oklahoma City University and Bachelors in Electrical Engineering from Pune, India.

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