Cord cutting is dead some say. Others think it a passing fad and that there's no staying power. Yet in the annual State of the Media Democracy report, Deloitte reports that some 20% of consumers have or are thinking about it. With the upswell of connected TVs I expect to see at CES, I bet this number jumps this year.
Deloitte's State of the Media Democracy (sixth edition) survey assesses media consumption preferences of nearly 2,000 consumers, ages 14 to 75 years old in the United States, revealing significant trends including increased access to content driving consumption, smartphones continuing to challenge other devices and the role of DVRs in preserving consumers' cable and satellite television subscriptions.
Streaming Video Leads the Charge
According to the report, since 2009, streaming of video has increased some 14% up from 28 to 42% this year. They cite availability as the major driver, that's certainly part of it as is better broadband coverage I think.
There's also been a 10% jump in those who say that streaming content is their favorite delivery format. A full 14% think it tops the charts. Plus, if movie studios are complaining about disc sales and bad box office figures they need to know that, according to the report, just 19% said they had not viewed a movie, available for purchase or rental, during the past six months.
How major of a change is that? In 2007, it was 37%. Streaming is definitely driving consumption and Hollywood should be embracing it far more than they are.
Second on the 'fave ways to pass the day with video' list is the DVR even though just 44% have one. Why is that? Perhaps because Time Warner charges something like $20 a month for a DVR box and service. Why exactly do they charge a monthly fee? I don't know. But that's the price here in Milwaukee. See, I have digital HD cable and a standard box, no DVR. If I want to get a DVR, they want me to pay $20 a month. So now you see why I don't have it, because I already pay $93 a month for cable and Internet. In fact, I've been contemplating actually dropping some of mine.
Basic Service $8.57
Standard Service $25.73
Digital Variety Tier $3.43
HDTV Converter $4.43
Digital Choice Tier $2.79
Note how there's a $4.43 charge a month for the HD-capable box and then another $2.79 for the service (Digital Choice Tier). I need the Digital Variety Tier so I can get BBC America. Standard Service is the mega-channel-pack of which has maybe 50-70 channels of which I watch 5 and is the largest waste. If I could pick and choose the channels I get in that pack and save $15, I would then get a DVR. But I don't need it as almost everything is online or on-demand.
Cord Cutting On The Rise?
Finally, on to the cord cutting. While just 9% have cut the cord, another 11% are considering it. Why? Because they can watch almost all the shows they want, online. Another 15% said they're watch movies, television programs, and videos from online digital sources soon.
Why haven't I cut my cable? Sports. Local NBA and MLB games are only available through cable. I would almost prefer a usage based system. Charge me for how much I watch, not how much you send that I may watch but most likely never will. Better yet, a la carte. That's why I think Google TV and Apple will succeed, they are looking at smaller bundles and a la carte channel lineups which should equate to cost savings in the long run for consumers.