Cord-Cutting Risk Seen as Low in CEA Survey

Some 10% Say They’ll Cancel Pay TV Service for Web Fare

By Todd Spangler -- Multichannel News, 6/6/2011 12:01:00 AM

Some 10% of pay TV households say they plan to cancel their cable, satellite or telco TV service this year, tapping Internet sources of content, not over-the-air broadcasts, according to research from the Consumer Electronics Association.

CEA called out the findings on over-the-air households, noting that currently 8% of all U.S. TV households rely on broadcast TV. Th at represents some 9 million homes, a number that has been steadily declining since 2005, according to the group.

SPECTRUM ANGLE

The trade group has been lobbying the U.S. government to institute voluntary incentive auctions for broadcast spectrum, arguing that it is a resource better used for high-speed wireless data services. CEA CEO Gary Shapiro said in a statement with the survey results that “the only cord being cut these days is the one to the antenna.”

The phone survey of 1,256 adults was conducted in December 2010, using Opinion Research’s computer- assisted telephone interviewing system.

National Association of Broadcasters spokesman Dennis Wharton said “CEA has zero credibility when it comes to calculating over-the-air TV viewership” and cited other estimates that over-the-air exclusive homes are more than 14% and rising.

The CEA said that, on the pay TV front, about 76% of survey respondents were “unlikely” or “very unlikely” to cancel pay TV service in the next 12 months; 14% were “somewhat likely” or “somewhat unlikely” to do so; and 10% were “likely” or “very likely” to cut the cord.

Cable, satellite and telco TV services remain the most popular source for video content, cited by 80% of respondents, followed by: Blu-ray/DVD (72%), free video-on-demand (45%), DVR (41%), paid VOD or pay-per-view (33%), online sources such as YouTube (31%), free online TV shows and movies such as from Hulu (27%), and paid online services such as Netflix (22%).

Approx imately 96% of U.S. households, or 114 million, own a TV, the CEA estimates. The report is available at CESWeb.org.

‘GEN Y’ LEADS WAY

Another survey released last week said pay TV providers were most at risk of losing “Generation Y” subscribers who are less attached to traditional TV and more willing to try other alternatives, such as Hulu or Netflix.

That survey, of 500 people aged 18 to 29, was done in February and March of this year by an independent research group for marketing consultancy Ideas & Solutions! of Los Angeles, founded by former cable and satellite-TV executive Glen L. Friedman.

Customers deemed least likely to cut their pay TV service represented the largest segment (40%). The remaining 60% were either leaning toward or seriously considering cutting out their pay-TV subscriptions.

Friedman, in a release with the results, called 18-to-29- year-olds “the demographic that completely transformed the music and the phone business and has already started to dramatically reshape the pay TV ecosystem.”

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John Eggerton contributed to this story.

WHAT HOOKS PAY TV SUBS

A survey of 18-to-29-year-olds found these factors desirable about multichannel-TV services:

• Sports programming

• Combining bills into one lump sum

• “Communal” aspects

• The “stumble upon” experience of browsing channels

SOURCE: Ideas & Solutions!