The Consensus

The Considerers: I’m definitely leaving! …Maybe!This group is on the fence when it comes to their cable subscriptions – they love cable, but entertain the idea of going without it. They’re fed up with:

The Creatures of Habit: What’s cord cutting?

Their allegiance to specific channels or programs (ex. football, Disney, international news)Compelling offers from their cable provider (ex. discount on bill, additional channels at no cost)The belief that more creative liberty is taken on TVIt’s engrained into their monthly budget and bills (electric, water, and cable are monthly staples)Cable is easy to use and access, whether watching live or digging into their DVR They’re resistant to watching online, and especially don’t want to wait to watch a favorite program

The cost of their monthly cable bill Their provider’s behavior– taking away channels, raising prices, treating customers best when they’re brand new Feeling wasteful due to having access to 100s of channels they never watchStruggling to find something they would like to watchPaying for cable when Netflix & Hulu have allthey needThe perceived ease with which others can steal cable off of them

Cable? What cable? This group confidently consumes entertainment as jacks of all trades, employing subscriptions, antennae, and anything else they can get their hands on.

This group can’t imagine life without cable – they’ve always had it, and always will. The most notable reasons they’re loyal are:

“Cable is expensive and I don’t watch enough TV for it to be worth it. With Chromecast and my subscriptions I can watch any TV show on Demand. For sports, I have the local channels through an antenna (everything is digital now, so the pic-ture is great), and if the game is on ESPN, I can stream that through Chromecast as well. If I got cable, I’d be paying for a whole bunch of other channels that I’d never consider watching. And I really, really like not having to talk to a cable TV repair or maintenance guy on the phone. That might be the best part.” – Male, 18-24, $25,000-$50,000

The majority of consumers aren’t wowed by current options, but aren’t confident enough in the alternatives to cut the cord. What could encourage consumers to keep tuning into cable, and prevent the cord-cutting 2% from growing exponentially?

The Cord Cutters: oh my!

PersonalizationNetflix and Hulu have conditioned viewers to expect choice and advice on what to watch. But when it comes to cable, a la carte options aren’t the only way for consumers to get what they’re looking for. If service could be somewhat customized, based on preferences for particular channels, packages, and content, consumers would be relieved to cut down on content they view as unnecessary.

Engrained HabitsMonthly cable bills are a staple in consumers’ minds and personal finances; they are comfortable and accustomed to paying this way. Furthermore, consumers appreciate the value that a cable and internet bundle provides, and often think that it would be more difficult to cut cable out of the equation than continue to pay for both.

Customer AppreciationConsumers recognize that there are two situations in which they are offered discounts: when signing up or threatening to cut the cord. Consumers want to be recognized as valued customers and thanked for their continued business – long before they threaten to sign on with a new provider or cut the cord altogether.

Cord Cutting: Myth or Movement?Cord cutting, or more specifically, the idea of consumers cancelling their cable TV subscriptions, has been a buzzworthy topic in 2014. But despite the stir, only 2% have actually cut the cord.1 We reached out to consumers to discuss their cable usage, likeliness to jump ship, and

expectations from providers in this shifting landscape. Looking towards 2015, will this 2% continue to grow?

1. http://www.forbes.com/sites/dorothypomerantz/2014/09/16/you-say-you-want-to-get-rid-of-cable-but-you

-wont/

2. http://time.com/money/2987833/comcast-cancel-ryan-block-time-war

ner-att-directv-cable-bill-save/

3.http://www.consumerreports.org/cro/news/2013/07/indoor-hdtv-anten

nas/index.htm

4.http://www.businessinsider.com/amazon-prime-versus-netflix-versus-hul

u-plus-2014-4#comments

5.https://pr.netflix.com/WebClient/loginPageSalesNetWorksAction.do?con

tentGroupId=10477

Those that haven’t cut the cord fall into two groups:

“The best part about having cable is being able to watch live TV – no waiting until it comes on Hulu. This is most important for sports. But cable is expensive and a luxury, I’ll probably cancel it soon. I’m just procrastinating going through the process of cancelling.” – Female, 18-24, $50,000-$75,000

“The best part about cable is the many choices, and the fact that channels take chances with the shows that they pick. There is more room for creative and different works exposed.” – Male, 45-54, $200,000 or more

“I love the variety of shows available. If I don’t like what is on a channel, I have many other choices. But there are 100s of channels that I have no interest in.” – Female, 55-64, $150,000-$200,000

“I was going to disconnect this last July. They offered me one more premium channel and lowered my monthly bill by $20. So far, so good, but we shall see.” – Male, 55-64, $75,000-$100,000

“I’ve considered getting rid of it; it’s not worth the money. Cable is too repetitive, and there are not that many good things on. I would keep it if my provider offered me a really good deal. They did this when I first signed up, but the rates kept going up.” – Female, 25-34, $25,000-$50,000

“I really have a problem with the way that my cable company behaves. However, I am spoiled by all of the choices that I have. I like having a big selection of channels and the choice of entertainment.“ – Female, 35-44, $100,000-$150,000

BY THE NUMBERS

The projected amount an average monthly

cable bill will reach in 2015 2

$123

The amount an average monthly cable

bill increases each year 2

6%

approximate price of an antenna, which

delivers local channels such as ABC, NBC,

and PBS 3

$30 $80

The price of a monthly subscription to Netflix

or HuluPlus 4

$7.99

The number of Netflix subscribers worldwide 5

50 MILLON

“I would like to see an a la carte service. This is what I like about Amazon Prime, you just pay for what you watch. I’d like to choose a few channels and pay for those, I’d probably watch about 5 channels from time to time. There’s way too much on TV today and I can’t even keep up with it all. Nor do I want to, as most of it is horrible. Better customer service would be good. The people at the cable company were never very knowledgeable or nice.” – Female, 45-54, $150,000-$200,000

“I’ve considered getting rid of cable because Netflix and Hulu Plus have everything that I would need. I decided to keep it because my 3-year-old is hooked on Disney and I can’t disappoint him. It wouldn’t be easy for me, either… I guess we are creatures of habit. I’d like my provider to offer me different packages that reflect my taste at a good price.” – Male, 45-54, $25,000-$50,000

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