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Cable cord-cutting may be a real phenomenon after all. For the first time in four years there’s been an increase in the number of homes that just rely on antennas to receive programs from local broadcast stations according to research firm Knowledge Networks’ 2011 Ownership Survey and Trend Report. A survey of 3,343 people in March and April found that 15% of all homes now just depend on free TV, up from 14%. That puts the total number of broadcast-only viewers at 45.6 million people, up from 42 million last year. Knowledge Networks says that about 30% of the free-TV homes are pay TV cord cutters. Most said that they cancelled their cable, satellite, or telco TV subscriptions because they wanted to save money.
Although the increase in free TV use is small, the fact that it grew at all could frighten some investors. A 1% drop in the number of pay TV subscribers would shave about 1% off the market value of the largest cable programmers including Time Warner, Viacom, Disney, News Corp, and CBS analyst Laura Martin of Needham & Co estimated last year. Pay TV companies struggled for more than a year to reassure Wall Street that there’s nothing to fear. Cord cutting concerns diminished at the end of the first quarter when cable, satellite and telco TV companies reported a slight uptick in their total subscribers.
The new figures also could complicate the Obama administration’s effort to promote wireless broadband. The FCC has pointed to the declining use of over-the-air TV to justify its effort to coax broadcasters to give up airwave spectrum so it can be used to send data to smartphones, iPads, and other mobile devices. Last week the Consumer Electronics Association, which supports the administration’s campaign, released a survey it took in December that said just 9% of all households strictly rely on free TV. Curiously, the trade group said that “Americans are not rushing to cancel pay TV services” because 76% said that they were “unlikely” to cut the cord within a year. The more telling statistic: 10% said that they were “likely” to do so and another 14% were on the fence.
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Very intriguing article. Thanks a lot David.
We cancelled our cable after realizing how little of it we actually watched. Every popular channel ends up being bumped to higher cost tiers and it simply became a ridiculous added expense. Between work, family and social life, it is rare to have the luxury of sitting down and watching much television. We just use Netflix or buy whatever movies or shows we want to see rather than paying every month. It makes more sense to schedule viewing when it is convenient for us.
When you analyze the cost of mobile phone service, high speed internet service, cable television and a land-based telephone combined. We were paying upwards of $300 a month for all these “services.” It’s just becoming ridiculous for most families.
The only thing we miss is the 24 hour cable news. Just get yourself a high quality, high definition antenna and you’ll be shocked how much programming is “free.” Plus you will shield your kids from most of the harmful crap that is targeted towards them on networks like MTV. You’ll be glad you did.
If they cut down free broadcast tv, we won’t watch tv at all. All we watch is over the air tv. There are great channels like Antenna TV which airs shows from when tv was great. We cut the cord long ago. The cost is outrageous and it’s mostly junk. On occasion, when there is a good show, the seasons are so brief it’s not worth it. The stats on free tv use can’t be accurate and the Obama admin might think it’s being “cutting” edge, but the zeitgeist is actually moving back in the other direction (despite those with an agenda and a stake who’ll spin it otherwise.)
Netflix.
I am one of those who has dumped cable due to its rising cost. By doing so I am saving $750/year, an amount that will only increase as cable rates continue to rise. Instead, I watch the broadcast networks over the air in HD, and the cable networks via DSL (with better quality than standard cable) — albeit after a delay. Simultaneous Internet release of episodes on the air date would of course be preferable, but waiting 1 day or even 30 days to watch episodes is a relatively minor annoyance given the huge cost savings.
What the heck do the pay stations expect – they keep on raising the rates of cable and satellite while supplying the same ole inferior shows. With Netflix on the rise and other alternatives, why not just wait til shows are available on TV or to stream and watch a whole season at once – of only the best shows like DEXTER and DAMAGES and BOARDWALK EMPIRE.
People are starting to learn they can live life without TV. Who would have thunk it?
I’ve been thinking this over for the past few days. The major drawback for a television aficionado such as myself is that I watch a spectrum of programs that would require a variety of alternative sources to continue viewing without paid cable.
What have we got here…
-Local broadcast (+ side: high quality HD, for free)
-HBO – HBOgo.com
-Everything else (Hulu, etc.)
Definitely need a quieter computer to pull this one off
I’ve been cable-free since 2010 with no plans to go back. That said, although I have the digital antenna, I rarely turn my TV on to watch a show as it’s being broadcast. My television viewing is almost exclusively done through streaming from computer. I have my living room set up so I can swing the computer screen so it’s facing my desk chair or towards my couch.
I’ve havent paid for cable TV since May 2008. Watch everything online now or through Netflix.
I haven’t had cable in almost eight years. Young folks I know don’t have TVs at ALL. They watch on laptops. A bunch of shouting talking head news anchors. No thanks. I can pick and choose what/who I want to see on the Internet and via Netflix, thanks. As for over-the-air TV, it’s just fine aside from shitty digital reception (remember the ads that said a digital picture was better quality? My reception messes up whenever a car drives by my house). There’s also that old-school mainstay, BOOKS. Not trying to make the cable companies rich. Fuck ‘em.
The economy is worlds better than it was 3 years ago, but with certain interests assuring those benefits are being enjoyed exclusively by the top 1-2% earners, and that the rest of us are literally compelled to produce more for less and less – with those who refuse, or who demand more, simply left unemployed all together, and with a certain contingent even demanding their political leaders continue to shower gifts on those top 1-2%, even as we all see the middle class rendered extinct, and their own family and neighbors attacked for the “greed” of a minimum wage, and for wanting contracts respected and adhered to, as long as ALL the sacrifices continue to be demanded only of those who can least afford them, expenses such as cable television will continue to fall under the category of “luxuries” in more and more homes.
We’ve gone from losing up to 800,000 jobs per month, to seeing very slight gains each month, but the jobs are paying less and less,and while workers are apparently “greedy” for wanting a pension and healthcare. But paying executives, even at firms that lose money, more tens of millions is part of the cost of attracting “the best and the brightest.”
I guess the only HOPE for good news is that providing a set-top cable box in every room of an executive’s 9,000 sqr. ft. 2nd or 3rd home will perhaps make up for all the cable services canceled by employees of the executive’s firm who had to be laid off to provide shareholders a dividend payment next quarter.
I got fed up with Comcast’s price gouging, since broadband internet is now a neccesity, it was just as easy to watch programs on hulu, netflix, etc. Free network broadcasts are just icing on the cake.
And I’m not an early adopter either, this is just the beginning of cord cutting. If I were network television I would be running ads advising people to cord cut, I realize the networks own the cables, but how cool is it, to let great cable programs find and grow their audience online over time. Study the history of “Always Sunny in Philadelphia” and tell me they aren’t really Hulu’s creation.
Knowledge Networks is a very reputable firm, but at the end of the day this is just a *sample* of people and the number moved 1%. Based on the *actual* numbers reported by the cable, satellite and telco companies, the number of homes with Pay TV service has gone back up the last two quarters and is back at an all-time high.
I almost cut the cord this year until the nice folks at the cable company slashed my bill by a 1/3. Cable channels for the most part broadcast barely a day’s worth of programming over a week. How many times is TruTV going to rerun the same handful of Hardcore Pawn in marathons? And if a show becomes a hit, I can get the DVDs in a few months and watch them commercial free via netflixs? Even HBO has lost its impact thanks to Netflix. And with the subchannels giving me more nostalgia TV than TVLand, what’s the point of that channel? so I can watch last week’s rerun of Extreme Makeover or the same Adam Sandler movie showing on TBS?
In the last 20 years there’s 200 more cable channels and barely the same amount of shows to watch.
i’ve actually been doing something similar by using one of those silicondust hdhomerun boxes connected to windows media center for a lot of my DVR needs. All just to avoid the box rental costs at cable/satellite.
A lot of people have gotten tired of being nickel and dimed by cable/satellite providers.
Then throw in some streaming site like netflix and you can save a lot of money.
We cut the cord last year and haven’t regretted it a bit. With an Internet-ready TV a Hulu Plus subscription, a Netflix subscription and broadcast TV via antenna, we have plenty of options. All legal, and 1/20th the price of cable. F-you, Time Warner!
I can’t speak for all Americans, but I do know that of the people my own age, cable is very low on the list of priorities. As we’ve started to move out of home, it makes more sense to save money and rely on the cheap content provided by Netflix, Hulu and ESPN3, especially when cable providers force subscribers to pay for so much content they don’t want.
Lots of my younger friends rely soley on the internet for their TV watching… i wonder how that will affect TV making / funding. Its hard to cut costs when the standards for TV are fairly close to features nowadays. Taking production out of California / the US… that’s how they save $. *Sigh*
Cord cutting is real. I hope this is a wake up call, but it appears the administration is blind to the central fallacy of their argument and will proceed with the sale of the public airwaves to the highest bidder (Big Wireless) who won’t let you listen or watch unless you pay a monthly fee to access it. What part of “public airwaves” does the Obama administration not understand?
Free TV, the Internet and DVDs are how I watch TV shows. Except for the short 2 year period my apartment complex had free basic cable, I cut the cord back in 1991. Didn’t help matters that over the air looks better than cable ever has in my neighborhood. The TV transmitters are just a few miles away, too.
As a television station operator I can tell you this is true I have been saying it for about a year at first it seemed slight or kind of flat of the amount of people on cable/sat but each month I hear from more and more people rediscovering OTA as a very nice way to not only save money but get better picture. In our area of Oregon people get 30 channels FREE and unless you have to have ESPN they seem quite satisfied. This does take a LOT of the wind out of the administrations sai about l. By the way this is not just low income as I travel around more and more higher income are changing because I am see NEW antennas that are nice and shinny appearing all a over.
The amount of HD content available for free through the airwaves in Los Angeles is pretty good when you consider that it’s FREE! Between that and the ability to purchase programming à la carte via HULU, Netflix, et. al. for television one can save a bundle.
If cable wants to reverse this trend (and I believe it’s a trend) they’ll wake up and offer their channels à la carte as well. Cable is a suckers game when you factor in the hundreds of dollars a year spent on programming never watched.
Unless you’re paying for reception (as outlying regions or those obscured by mountains must) why pay for content which has already been paid for by advertising?
Interesting to learn of this. Just recently my family cut off our cable so now we’re just getting 20 or so TV channels. We did it to save money since we’re not making as much as we did last year. Oh, and there’s too many crappy shows now and TV networks aren’t the same as they use to be. (Come on, look at MTV, The History Channel, and TLC!) So why pay to watch stuff you won’t see?
I will miss Adult Swim, Turner Classic Movies, and MYTHBUSTERS though.
Comedymaven… That rhetoric had me rolling on the floor… “The economy is worlds better than it was 3 years ago” You are priceless!
At first, I hated Hulu for expecting us to pay for Plus and still sit thru ads, but I fell victim to their promo.
Initially, I just wanted to get a week’s worth of free Hulu Plus on my iPhone via their 1-week free trial, but dammit they hooked me in. I canceled all my TV/cable subscription stuff.
Hulu Plus ain’t half bad. $8 a month and I get to watch my shows almost anywhere w/ my iPhone. But I don’t think it’s for everyone, since they seem to not carry quite a few uber-popular TV shows (Seinfeld, Friends, Mad Men, etc.) and CBS shows. Just give me The Office, Family Guy, Modern Family and a few others and I’m good — although they need to get Community to be mobile-watchable.