NEW YORK--While a new generation of cord nevers may be willing to put up with occasional poor streaming quality of online video, cord cutters--that coveted group of past pay-TV subscribers who have ditched linear video service for Internet viewing--might return to the pay-TV fold if their streaming experience is bad.
Pay-TV operators lost a total of 179,000 video subscribers in the third quarter, more than double the 83,000 lost in Q3 2013. On Friday, that was definitive evidence enough for the Wall Street Journal to loudly declare that "'Cord cutting' is accelerating as more consumers drop cable and satellite-TV connections."
The differences between cord cutters and cord nevers is so pronounced that "any company targeting these consumers must think in terms of two distinct packaging and pricing strategies," an online video research firm says.
The growing portion of U.S. broadband homes without a pay-TV subscription has reached 14 percent, up from 9 percent in 2011, according to a new study from The Diffusion Group.
Fresh off last week's big a la carte programming announcements from HBO and CBS, gleeful cord cutters are crunching the numbers, adding up the monthly bills on the SVOD series they'll need to once and for all ditch that dreaded cable bill. As TV News Check shows, you can cobble quite a few of these services together and still come out way ahead in terms of the average monthly pay-TV bill.
Since 2010, the top 40 most widely distributed cable channels have lost an average of 3.2 million subscribers, or 3 percent of their distribution. However, these networks' attrition doesn't match up with any overall decline in pay-TV usage, which despite a lot of sturm und drang, has only seen minimal sub loss.
When you're watching a whole new generation forsake your distribution scheme, and you're seeing your advertising dollars slip away to digital platforms, you do what you have to do to survive. That's a philosophy many pay-TV providers are beginning to adopt as they develop lower-priced offerings that cater to a cord-reluctant generation of millennials. FierceCable Editor Dan Frankel takes a closer look at pay-TV's OTT shift. Special Report
Programmers are suddenly willing to play ball with OTT insurgents and are conceding to pared-down bundles targeted to millennials. But is their desperation a good thing?
With Dish Network and Sony still working out the nitty-gritty content details of their respective over-the-top TV services, AT&T made its own grab for cable-wary cord-cutters and cord-nevers, announcing a $40 U-verse introductory package that offers broadband, a slimmed-down cable package, HBO and Amazon Prime membership. The caveat? The deal lasts just one year, after which subscribers must take a higher-priced, traditional IPTV bundle.
Trying its hand at an emerging pay-TV industry strategy of hooking previously uninitiated customers with stripped-down programming packages, AT&T will soon bundle broadband service, a limited number of basic cable channels, HBO and--wait for it--Amazon Prime for $40 a month.