Amplifying other recent studies indicating that the pace of cord-cutting is accelerating, more than half (52%) of those who have cut the cord did so in the past two years, according to a new study from The Diffusion Group.
About one-third have cancelled traditional pay TV in favor of other outlets, such as over-the-top and over-the-air, TDG found in a survey of 1,993 adult broadband users that was conducted in December 2016 and part of a report called Life Without Legacy Pay-TV: A Profile of U.S. Cord Cutters and Cord Nevers.
TDG, which sees high prices and the rise of less expensive on-demand services as key contributors to cord-cutting, expects to see the trend continuing to “haunt operators” even as video ARPU among existing subs dip.
"Spending $70+/month for service that provides 2X value seems odd when you can pay $10/month for a service with 1X value," Michael Greeson, co-founder and principal at TDG, said in a statement. "The calculus of today's TV subscriber has been radically altered by the presence of SVOD services like Netflix."
He also noted that consumers have more flexibility and options for live TV amid the emergence of virtual MVPDs from traditional providers, such as DirecTV Now and Sling TV, as well as from Sony PlayStation Vue, YouTube TV and Hulu. fuboTV, another independent vMVPD, greatly expanded access to authenticated TV Everywhere sites and apps from programmers this week.
Greeson said Comcast is among the pay TV providers that has bucked the trend as it leans on its X1 platform for set-tops and mobile devices.
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"TDG observed long ago that incumbents were going to have to make a choice: either resign themselves to being a 'dumb-pipe' provider, or invest in using IP, change the TV experience, and become the go-to source for all things video,” he said. “Comcast tuned into the later, investing in the hardware and software required to bring the power of IP to the legacy TV experience. The company is now gaining video subscribers when others are reporting loses."
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