The surprising truth about cord cutting

Despite all the recent hype about cord cutting, a new study reveals startling information about what people are really doing when it comes to cancelling cable.

Yahoo Homes
People aren't cutting the cord
.

View photo

People aren't cutting the cord

Are you thinking about cancelling your paid television subscription? If so, you aren't alone. Recent studies show that cutting the cable cord has been on the minds of many people lately.

In fact, as many as 31 percent of surveyed respondents said they planned to cut paid television services or were seriously considering it, according to a 2012 study by Tremor Video, an independent online video technology company.

However, even though the idea of moving away from paid television services has received a lot of hype in the media recently, the 2013 study "The Reality of Cord Cutting in North America" by Deloitte predicts that less than 1 percent of Americans will actually cut the cord this year.

Keep reading to learn why consumers are more likely to stick with their cable provider - rather than cutting the cord.

Family Disagreement over Cord Cutting

While one family member may have every intention of slashing household costs by cutting cable or satellite television, the rest of the family might not agree.

In fact, it is easier for consumers to make changes to or cancel their individual cell phone plans than their television services, says Duncan Stewart, director of Research, Technology, and Telecommunications for Deloitte.

"People own cell phones, but households own televisions," he says.

This is especially true if there are sports fans, reality show watchers, or news junkies in the home.

In most cases viewers must pay for current broadcasts of these types of programs as they are unavailable through third party alternatives, reports the Deloitte study. The study also notes that over 80 percent of North American families have at least one person who is willing to pay for sports channels.

[Want to find a cable package that's right for your family? Click to find a provider in your area now.]

Television Viewers Re-Subscribe after Cancelling

Some television viewers do follow through on their intentions to cancel their television subscriptions. However, it doesn't take long for many of these viewers to discover that life without paid television might not be all that it's cracked up to be.

"Another thing that happens is that people cancel cable subscriptions and enjoy a month or two of the outdoors, or pursuing other hobbies," says Stewart. "And then winter comes, or the new television season, and the show they love isn't available on the Internet, so they sign up again."

The television companies recognize that these customers exist and work hard to woo them back.

"We try to work with customers to make sure we are meeting their needs and help move them to a different package if necessary," says Steve Necessary, vice president of Video Product Development and Management for Cox Communications. "If customers ever choose to leave us, we want to serve them well in that transition too, as we will work hard to earn back their business in the future."

[Do you want to find a cable package that's right for you? Click to find a provider in your area now.]

You Could Save More with Bundling Than Cord Cutting

If you already have a bundled package with your service provider, cutting the cord may not be as cost-effective as you might expect.

"Bundles make it easy for customers to save by having a single provider for TV, phone, and Internet," says Necessary. "For our TV product, there are several packages that fit any family - from sports lovers, movie lovers, Hispanic families, news junkies, the possibilities are endless."

When a bundled customer wants to cancel one of the services, such as the TV, they may no longer qualify for the discount they enjoyed while they had the total package, Stewart explains. This reduces expected savings.

"Bundling works," says Stewart, and the television companies know it.

According to the Deloitte study, these companies can offer pay TV services and Internet access together at a price that reduces the incentive to cancel the television service.

Some customers may even be surprised to learn that paying for Internet service on its own can cost almost as much as the entire bundle.

[Do you want to bundle your cable, Internet, and phone? Click to find a provider in your area now.]

So, What Does the Future Hold for Television Viewers?

The consensus among experts seems to be that the number of households watching paid television won't significantly decline. In fact, Necessary believes that new technology means there are even better options around the corner for TV fans.

"The future of video and the cable viewing experience is brighter than ever," says Necessary. "It is driven by two powerful factors: more content than ever and technology that helps us bring customers closer to the things they care about most." For example, Necessary says that Cox Cable now has almost 40,000 titles in its On Demand library. The cable company is focusing on customizing television options for individual viewers.

What's more, Stewart says that while the number of cord cutters  will continue to rise, it won't be significant enough to matter to the television providers.

"The cord cutters are the least attached and watch the least amount of television," Stewart explains. "The number of people without paid television five to 10 years from now will still be less than 10 percent," he predicts. He also suggests that the television companies will continue to profit due to the dedication of many television fans.

 "The television companies will even be able to raise their prices because the people who keep paid television are the ones that watch it the most."

View Comments