A survey suggests that almost a quarter of television households in the United States do not subscribe to cable or satellite services. That would be significant if it reflected real subscriber numbers. However, the informitv Multiscreen Index indicates that 10 pay television services have around 75% of the market and have lost relatively few subscribers between them.
The GfK 2016 Ownership and Trend Report shows that 17% of television households in the United States now rely on over-the-air broadcast reception, up from 15% in 2015. Another 6% do not have broadcast or pay television reception and instead use internet services such as Netflix, Amazon, Hulu or YouTube, compared with 4% a year previously.
“The fact that a statistically significant increase in broadcast-only reception occurred over just one year may be further proof that the cord-cutting/cord-never phenomenon is accelerating,” said David Tice, the senior vice president for the GfK media and entertainment practice.
He pointed out that if you include homes that have no television at all, which is about 3% of households in the United States, then 73% of homes have pay television, “with the attendant implications for all stakeholders — not just the pay TV services themselves, but also networks, content providers, and advertisers.”
Television households with a resident between 18 and 34 years old are less likely to have cable or satellite television. According to the survey, 22% of these homes are using broadcast only reception and 13% are only watching an internet service on their television sets. That is a total of 38% of such households without cable or satellite.
Households with a resident aged over 50 are more likely to have cable or satellite television, with 82% subscribing to pay television.
Over the air reception is more common in television households earning under $30,000 a year, at 26%, and those with Hispanic residents, at 24%, compared to 17% among all television homes.
The report suggests that overall 13% of television homes have stopped paying a traditional television subscription, generally referred to as ‘cord cutters’. Almost half of them subscribe to an online subscription video service.
A further 11% are described as ‘cord nevers’ and have never paid for traditional television. 30% of them subscribe to an online video service, compared to 36% across all television homes in the United States.
Of the cord cutters, 28% gave the top reason that they could now watch online, up 12 percentage points from 2014. However, 72% said it was a result of overall cost cutting and 50% said that pay television did not offer enough value.
The GfK research was based on an online survey of just over 3,000 adults in the United States and was carried out in March and April 2016.
Bear in mind this was an online survey of self-reported behaviour. It also only appears to reference cable or satellite television, perhaps overlooking over 11 million homes that have Verizon FiOS or AT&T U-verse telco television services.
So how does this translate into the total number of homes across the United States?
Nielsen estimates the national television household universe at 116.40 million television homes for the 2015-16 television season.
According to Nielsen, 99.26 million homes have cable, satellite or telco television, which is 1.55 million fewer than a year previously. 17.18 million homes have broadcast or broadband only, which is just under 15% of all television homes.
The informitv Multiscreen Index shows that the top 10 services in the United States had a total of 87.16 million subscribers at the end of the first quarter of 2016. Although some homes may subscribe to more than one service, that alone represents around 75% of television homes in the country. It does not include subscriber numbers for private companies or any of the smaller cable operators.
Despite many subscriber losses and gains in recent years, the total number for these top 10 services has remained remarkably resilient, given all the talk of cord-cutting.
These top 10 services had just 752,000 fewer subscribers than they had two years previously, which is a net loss of less than 1%.
These totals include certain adjustments and acquisitions, but this evidence implies that averaged across the top 10 services there has not been a massive loss of subscribers in recent years.
Furthermore, pay television has never completely saturated the market, although analysts estimate that it reached about 87% at its peak in 2010. The absolute number of subscribers has remained at around the same level, but the number of occupied homes has increased, meaning the penetration has fallen to about 83%.
While there are undoubtedly those that have cut their cable or satellite subscription, often for reasons of cost, there has always been a proportion of the population that has been unable or unwilling to pay for television and rely on free to air services, or simply do not have a set.
The 2016 Ownership and Trend Report is available from GfK. The Multiscreen Index is available from informitv.