Intriguing notion: Cord cutting may actually slow in 2017
More people plan to buy a pay TV plan next year than this year
December 20, 2016
Cord cutting, or eliminating pay TV subscriptions in favor of watching digital video available at much lower prices, has become one of the top concerns in the media industry over the past three years as pay TV subscriptions dropped.
But has that worry been overblown? Is it possible that cord cutting isn’t nearly the danger it’s appeared to be?
A new survey from PricewaterhouseCoopers suggests the answer to both questions is yes.
It finds that the percentage of people who plan to subscribe to pay TV in the next year has risen, from 71 percent at this time last year to 84 percent.
Now, that’s still below the 91 percent who intended to use pay TV in 2014, but it’s a significant uptick at a time when reducing cable, satellite or telco services has been the overriding trend.
Skinny bundles with bigger bills
Why the reversal on cord cutting? It appears to be a combination of factors, one being the emergence of skinny bundles, which allow people to reduce their TV bills but still continue to receive a handful of their favorite cable networks.
The skinny bundles were introduced a couple years ago by services from Comcast to Verizon to encourage people to continue with their pay TV subscriptions while still saving money.
Instead of paying $150 a month for 300 channels, the bill might be $39 per month for 15 sports-focused networks, for instance.
The idea is to turn cord cutters into cord trimmers. Interestingly, the PwC survey found roughly half of cord trimmers say they are actually paying more for TV than they did the previous year.
This may be because when people trim their pay TV packages, they tend to add streaming video on demand services, such as Hulu, Amazon or Netflix.
Though individually they are fairly cheap, at $10 to $11 per month, if you sign up for all three plus add an over-the-top service such as HBO Now, you’re pegging on an additional $50 per month to your pay TV bill.
If you’re not careful, you can end up spending more money rather than less. That could make sticking with the standard pay TV service more attractive and thus cut down on cutting the cord.
SVOD complementing pay TV subscriptions
Interestingly, the PwC survey predicts that SVOD services will remain popular as add-ons to but not replacements for pay TV packages.
This means people may get just one service in addition to what they currently receive for their cable package. So, for instance, if a new season of “Orange Is the New Black” has just bowed on Netflix, it may be a good time to subscribe to the service, then drop it a few months later to pick up Amazon for a new season of “Transparent.”
Another notable finding in the report: Mobile TV viewing is growing, as you’d expect. Three-quarters said they watched more mobile video this past year than the previous one, and more than half said most of that was watched on their smartphones.
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