A new survey conducted by Roku finds that 32% of U.S. households do not have a traditional pay TV service.

The study said that 25% of households identified as cord shavers cut back on their pay TV service, with 45% of cord shavers saying they’re likely to cut the cord entirely in the next six months.

Only 17% of recent cord cutters said they would re-subscribe to traditional pay TV in order to watch live sports when they return this year. If sports don’t return, 52% of traditional and cord-shaver households are likely to reduce their package if live sports don’t return to TV. Meanwhile 31% said they would subscribe to a live sports streaming service.

The study points to the rise of streaming as the way more people are getting their video entertainment.

“While we entered 2020 with significant momentum around cord cutting, we’re now seeing that the COVID-19 pandemic and the pause of live sports has caused consumers to rethink how they access home entertainment and what they are willing to pay,” said Roku chief marketing officer Matthew Anderson. “It’s clear that value matters more than ever and the abundance of free content, free trials to premium streaming services and the savings that consumers achieve are fueling the shift to streaming.”

In terms of value, most cord cutters said that reducing entertainment expenses was their No. 1 reason for dropping pay-TV.

Roku users who cut the cord said they saved about $75 a month. That number was higher than for cord-cutters who said they use other streaming devices.

Nearly half of all U.S. households said they’re watching more free ad-supported TV during the pandemic than they were before and 40% of recent cord cutters said that free trials offered by streaming services helped convince them to drop their traditional pay services.

Roku’s study was conducted by MACRO Consulting, which interviewed 7,000 Americans over 18 in March, followed by 2,000 more Americans in May.

Parks Associates said 15% of pay TV subscribers downgraded to a less expensive bundle from the first quarter of 2017 to Q1 2018.

The research company also said that one third of pay TV subscribers living in U.S. broadband homes changed their services during that span.

"OTT subscriptions are on the rise, reaching 64% of U.S. broadband households, as pay-TV subscriptions decline, so all players are looking for that magic combination of service types, content, and pricing in order to secure subscribers," said Elizabeth Parks, senior VP of Parks Associates, in a statement.

Parks reported that about 10% of U.S. linear video subscribers in broadband homes upgraded their service. About 5% subscribed to a service after going without pay TV for at least a year. 

Consumer Reports magazine and its advocacy affiliate Consumers Union are ganging up this month on cable fees and bundling.

They've launched a "What's the Fee" (WTF) online assault on system operators, with Comcast as its first target. Meanwhile, the 12-page cover story, "Take Control of Cable TV," in Consumer Reports's August issue, lays out an eight-step plan for cord-cutting, or at least cord-shaving. The section includes advice on "cable replacement services," including streaming media.

The core element in the magazine report is a section on "Cable TV's Sneaky Fees," which is step one in Consumers Union's attack on extra fees that "inflate the costs" for purchases across industries ranging from utilities and airlines to entertainment and banks. The non-profit organization said a couple of weeks ago that it delivered "more than 110,000 petition signatures to Comcast ... calling on the company to address the issue" of extra fees.

In its tally of fees -- most of which CR contended should be included in the core bill -- the magazine totaled up to $71 in monthly fees, including sports surcharges, digital video recorder service, set-top boxes and "High Definition Technology" charges. In addition, cable bills include broadcast retransmission fees which, CR said, should be "baked into the advertised price."

“It’s time for Comcast and the cable industry as a whole to ditch these fees, and advertise the full price of their service so that consumers aren’t left asking ‘WTF?’ when they get their bill,” according to published reports of the comments by John Schwantes, senior policy counsel for Consumers Union.

Comcast responded, in a corporate statement to the Philadelphia Inquirer, that its "Xfinity bill was designed ... to make it simple to understand.” It insisted that “broadcast television and regional sports network fees are itemized" so that subscribers can "clearly see those costs." A company spokesman also told the local newspaper that consumers receive "a complete list of charges and fees ... as part of our sales process.”

Consumer Reports said it started its WTF campaign because complaints about cable fees are so frequent. It said that more than 25,000 of the petition signers identified Comcast as their biggest problem -- approximately reflecting the company's share of the total U.S. Multichannel Video Programming Distributor subscriber base.

The campaign and the August cover story continue a decades-long look at cable by Consumers Union and Consumer Reports. As long ago as 1987 the magazine ran a "Cable TV" cover story, focused on questions such as, "Are the service and the programming worth the money?" In 2004, Consumers Union presented to policymakers the results of a nationwide survey that found two-third of cable subscribers wanted an à la carte "option to select the channels in their plan" and 30% "would pick fewer channels even without proportionate savings." When the Senate was deliberating cable legislation in 2009, CU pushed for unbundling channels so that decisions about what to buy "would be best left to consumers themselves."

Related: Roku Hits Back at ‘Consumer Reports’

Consumer Reports, which has about six million members/subscribers, has been the name of the parent membership organization since 2012, when it reorganized and made Consumers Union its political advocacy subsidiary. Prior to then, CU was the parent non-profit, with CR the monthly magazine and buyer's guide.

The August CR articles encourage viewers to consider a move to "free" over-the-air broadcasting, and includes a list of 10 recommended TV antennas to receive that service. It lays out packages of skinny bundles and over-the-top services (e.g., Netflix, Hulu, SlingTV and DirecTV Now) that separately or collectively could shave $100 or more from a monthly cable bill. 

It also recommends that customers who want to move to a lower tier of cable TV service should "bypass regular customer service and ask to speak to a customer retention specialist" when they contact their local provider.

Another sidebar in the long report recommends "The Best Streaming Media Players." The report acknowledges that customers would still need to buy a broadband access service (probably from the cable carrier) and could be subjected to future price or packaging revisions.

In a multi-country consumer study, TiVo found that one in four respondents who have had pay TV services for less than 12 months are “extremely likely” to cut or shave the cord within the next six months.

That was a big takeaway from an online survey of 8,500 pay TV and OTT subs across seven countries (2,500 in the U.S., and 1,000 each in the U.K., Germany, France, Brazil, Mexico and Colombia).

TiVo found that 55% of pay TV subs in the U.S. and 42% in Western Europe have had service with their current provider for four years or more, compared with 32% in Latin America. In the U.S., 51% of that group are Boomers, and just 11% are Millennials.

“As new, shiny OTT services and streaming devices continue to proliferate in the market and compete for consumer attention, there is considerable risk that younger generations may come to view pay TV as an antiquated service that doesn’t play a role in their daily lives,” Paul Stathacopoulos, vice president of Strategy and Research at TiVo, said in a statement. “Service providers must focus on delivering entertainment experiences that are compelling to a highly segmented viewer composition. “

The study also found that voice navigation is a hit with consumers, as 60% of those with a voice remote use it frequently or every day, and that 64% of those with a voice-controlled home assistant use it frequently or every day.

It is a brave new world for television. As more consumers embrace cord-cutting, cord-shaving and skinny bundles, multichannel video programming distributors have started to gain the upper hand in negotiations with the big cable networks. It’s time for those cable channels that have been riding on the coattails of their big-brand parent companies to face the music.

Distributors are no longer being forced to take on smaller, low-rated channels to appease the Viacoms or Disneys of the world. They are no longer interested in having six MTV channels when all they want is the original-flavor MTV. They can pass on having eight Nickelodeon channels when the original Nickelodeon will do. One thing that’s been said – and bears repeating – is that distributors are looking for something non-duplicative. Having 16 music channels is clearly overkill. And being forced to take MTV Tres in order to get MTV is tantamount to being held at gunpoint.

Related: Viacom’s Bakish Touts Skinny Bundles

Earlier this year, we saw reports that Viacom is planning to narrow its focus to six key channel brands – Nickelodeon, Nick Jr., MTV, Comedy Central, BET and Spike – while shifting away from smaller brands like CMT and TV Land. What message does that send to MVPDs? Are Viacom’s other brands still viable?

We’re at a day of reckoning for the large media conglomerates who have relied on the successes of their popular networks to protect their smaller, less appealing networks. They no longer have the leverage needed to force distributors to buy their large bundles of networks. For the first time, these smaller networks must stand on their own and step out from under their parent company’s protective wings.

Before, a distributor trying to get subscribers couldn’t afford not to have the key brands like MTV, CNN, Nickelodeon, etc., so they bit the bullet and loaded up on their other channels too. That’s no longer the case. With so many other choices for entertainment, the power balance has shifted, and the MVPDs now have the upper hand. In the age of the skinny bundle, distributors are free to ignore the privileged, spoiled kids and focus on the scrappy, punk upstarts that offer the kind of content their subscribers are interested in.

The current opinion is that independent channels are in danger, that they will get lost in favor of skinny bundles. This is not necessarily true. As skinny bundles are introduced, the smaller networks that had previously secured carriage via larger network leverage will no longer have the luxury of being safe within a larger network group. Instead, the playing field has been leveled for all smaller nets – the independents and those under a larger corporate umbrella.

MVPDs should not be pressured into buying smaller nets if they want the larger nets under that same umbrella. All networks should – and soon will – prove the value of what they represent as a network. Unraveling these large network bundles into smaller, skinnier bundles will allow the independent cable network a chance to shine. In this new, free market, the indie doesn’t have to worry about competing against the smaller net that relies on its parent company. The indie can stand up against that smaller net on its own and, if the indie’s product is appealing, the indie will survive.

This unbundling is causing the smaller nets that previously had the support of their parent companies to step up their game. If they were only surviving because of their parents, they might not be long for this world. Meanwhile, the independent cable networks have been on their own and made it work. They’re at an advantage. Before, independent networks had been unable to secure as much distribution as possible simply because many of these smaller channels were taking up space. If these smaller channels go away, wouldn’t there be more opportunity for independent networks to begin to gain distribution? The demise of the smaller networks within the conglomerate portfolio could be more beneficial for independent nets.

In the past year, we’ve seen ABC Family and VH1 Classic become Freeform and MTV Classic, respectively, and go down in viewer ratings. This February, NBCUniversal announced that it would be reformatting Oxygen network with true-crime programming geared toward women. After getting dropped by AT&T’s DirecTV and U-Verse, NBCUniversal announced that it will shutter Esquire Network and relaunch it as a digital-only platform. We’ve seen ESPN2’s 19% ratings dip for parent company Disney. Syfy is down 30% for parent company NBCUniversal. USA (NBCUniversal), TNT (Turner), Discovery (Discovery Communications), History (A&E Networks), AMC (AMC Networks) and FX (Fox Entertainment Group) were all down year-to-year in viewers as well.

There are some smaller networks that have been able to grow their ratings under their parent companies: SundanceTV (AMC Networks), Logo (Viacom), Bravo (NBCUniversal), OWN (Discovery) and El Rey (Univision); but overall, ratings have been in decline. It’s a tough market.

The smaller, independent networks that never had the support of a larger parent company are already used to fighting tooth and nail to support and promote their content. They’ve always had to prove themselves. That is why you see ratings growth for indie networks like Hallmark Channel, DIY, Ovation and WGN America. If you have a product worth watching, people will show up.

Not every independent network has been so lucky. We saw what happened to Participant Media’s Pivot TV last year. While some said that Pivot was the first casualty of skinny bundling, others say that it was too niche to survive, bundling or not. If your content is not in demand, should you survive? If you don’t have a big parent company, probably not. Now, in the age of cord-cutting and cord-shaving, if you do have a big parent company, you might not either.

Liz Janneman is executive vice president, network strategy, at Ovation TV. Image by Gearstd, iStock/Getty Images.

The Walt Disney Co. could start issuing pink slips at its flagship cable sports channel ESPN on Wednesday, and according to several reports the layoffs could be larger than expected.

According to a report in the Washington Post, ESPN is expected to start jettisoning employees on Wednesday in a continuing effort to keep down costs. But the number of workers affected could be larger than the 40 to 50 people expected back in March, with some reports saying as many as 70 TV/radio anchors, reporters, analysts and online writers could get the axe in the coming days and weeks.

ESPN declined comment.

This wouldn't be the first round of layoffs for the Worldwide Leader in Sports. In 2015 ESPN laid off about 300 behind-the-scenes workers. 

Pay TV networks have been hit hard as consumers have increasingly cut the cord or switched to less expensive – and less sports intensive – skinny bundles. According to Convergence Research Group, U.S. pay TV customers declined by 2.05 million in 2016 – nearly double the 1.16 million lost in 2015 – and are expected to shed another 2.11 million this year.       

ESPN has been clobbered over the past few years, shedding millions of subscribers as consumers have opted out of pay TV all together or drastically reduced their video packages. According to March Neilsen Universe estimates, ESPN was in 87.4 million homes, down 748,000 from January.

This round could include some fairly prominent on-air personalities, according to reports, although none were named. According to a report in Monday’s Sporting News, some workers have approached the company offering to take pay cuts to stay while others have received buyouts to release ESPN from long-term contracts.

About 20% of pay TV customers could sever the pay TV cord in the coming year as frustration with the lack of choice and control over their entertainment packages could reach a head, according to a new study by research firm PricewaterhouseCoopers.

The study – Videoquake 3.0: The Evolution of TV’s Revolution – took data from a survey of more than 1,200 consumers, focus groups and social media listening.

The survey found that pay TV is losing its grip – the number of consumers that said they could see themselves subscribing to cable in the following year dropped from 91% in 2014 to 79% in 2015, which PwC says implies that about one-fifth of consumers could ditch their cable subscription in the next year.

“Consumers’ relationship with video content is fundamentally changing – and the shift shows no signs abating,” PwC said in the study, adding that content providers need to rethink their business models to remain viable. That could include repositioning the bundle to better reflect ala carte demands; redefine how they measure audiences to gauge consumer behavior across all platforms; focus on improving the user interface to allow customers to find what they want when they want it.

According to PwC, 79% of U.S. consumers subscribe to some form of pay TV, but of those subscribers, 23% said they engaged in cord trimming in the past year. About 16% of those surveyed said they unsubscribed from pay TV service in the last 12 months and 5% said they were cord-nevers and never subscribed to pay TV service at all.

The study also found that while the average subscriber receives 194 channels, they regularly watch just 17 channels.

PwC says consumers are clamoring for control – 56% said what would get them back on the pay TV bandwagon is the ability to customize their video packages to include only the channels they want. And PwC said that sentiment was not exclusive to cord-cutters – about 45% of current pay TV customers said they most preferred an a la carte package of channels they could customize themselves. 

Consumers, especially younger ones, are watching that content on multiple screens. According to the survey, 77% of 18-to-24 year olds are accessing TV content from the Internet and increasingly on mobile devices, PwC said.

OTT services also are growing, with 78% of consumers surveyed saying they subscribe to at least one OTT service. Among pay TV customers, 70% said they subscribe to a streaming service as well.

While on-demand or OTT streaming services are appealing to consumers, there’s no single catch-all solution, PwC said in the study. Netflix leads the OTT pack—nearly two out of three Americans have a Netflix subscription—but 52% of Netflix subscribers also subscribe to cable, and 55% also subscribe to at least one other OTT platform. Among Hulu subscribers, the overlap is even greater – 91% of Hulu customers subscribe to at least one other OTT platform—more than double the number of Hulu subscribers who also subscribe to pay-TV. Amazon Prime subscribers have a similar profile—79% subscribe to at least one other OTT platform, and 53% subscribe to cable. According to PwC, this means that in the battle for market share, OTT services are a threat to cable, but not necessarily to each other.

Just a couple of years ago, over-the-top (OTT) service was being called “an attractive new gateway to reach TV viewers.” But, today, it seems that almost everyone is using OTT services – streaming of video content over the Internet without the involvement of a multiple-system operator in the control or distribution – either to supplement traditional cable TV services or sometimes as a total replacement for pay TV.

A recent Parks Associates survey found that 7 percent of broadband households, or 8.4 million households, in the U.S. subscribe to at least one OTT service but not to a pay TV service. This demographic includes both “cord cutters” – former pay TV subscribers who have opted for OTT streaming services instead – and “cord nevers.” Cord nevers are the younger college generation raised on social media and Netflix, who are used to any content, any time, on any device. Viewers in this generation often decide not to sign up for pricey cable packages when they move into their first apartment.

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While the “cord cutting” impact on the pay TV industry can be dismissed as minor, the Parks Associates survey also shows that 57 percent of U.S. broadband households now subscribe to an OTT video service. This indicates that “cord shaving” has now become a mainstream phenomenon. When OTT supplements traditional pay TV, subscribers are likely to cut back on existing pay TV services as they evaluate their entertainment options.

A Tipping Point in Terms of Revenue

At the NAB conference earlier this year, SeaChange CEO Jay Samit told audiences that the cable industry has already reached a “tipping point,” which he defined as cable companies making more money by delivering video through broadband rather than through their traditional systems. In fact, he stated that Comcast was just reaching this point of making more money from its broadband Internet services than it does on video.

As the industry reaches this tipping point where streaming OTT content has become the norm, new approaches are needed to deliver the huge volumes of Internet video and other OTT content demanded by consumers.

Local Content Delivery Enables Effective OTT Delivery

When OTT content has to be delivered across the Internet from the original source each time a user requests access, this is no longer an effective approach – even when aided by a global CDN. This model causes network congestion, which makes interrupts video delivery.

The seminal Conviva 2015 viewer experience report demonstrates that 28.8 percent of all Internet streams in 2014 experienced buffering while 58.4 percent suffered from degraded video resolution, with both metrics deteriorating as compared with 2013.

To be truly effective, the most popular content must be brought closer to end-subscribers and delivered locally.

A local approach to content delivery offloads the network to ensure a better Quality of Experience (little or no buffering and support for high video resolution) and significant costs savings for the network operator. With a local content delivery model, consumers gain an improved viewing experience, which translates to increased consumer satisfaction with the broadband service provider.

Alan Arolovitchis the chief technology officer for PeerApp, a provider of an open content delivery platform for mobile, telco and cable operators that boosts their networks to deliver OTT content to end-customers with high QoE and efficiency.