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Cord Cutting: The Tech Media Blows Another One
By Swanni

Washington, D.C. (March 12, 2013) - Nielsen estimates that the number of people who have dropped their pay TV services to watch video online has increased by just three million over the last six years. That's an average of 500,000 a year, which would be less than one percent of the pay TV audience each year.

The relatively small number of 'cord cutters' will likely surprise some tech journalists and Wall Street analysts who have frequently written and opined that dropping pay TV service is a rapidly growing American phenomenon.

For example,
Engadget.com published an editorial in 2012 under the headline, "Cutting The Cable Cord Is a Young Trend Going In the Right Direction." The editorial stated: "Cable companies are not losing sleep but they should be having bad dreams."

But in  report called 'Zero TV,' Nielsen said slightly more than two million people were cord cutters in 2007 with the number rising to just five million in 2013. Nielsen acknowledged that's a "small group" with 95 percent of U.S. viewers still getting their information and entertainment from traditional pay TV services.

The company added that the so-called Zero TV household still watches online video and uses their TVs for gaming and other entertainment. In fact, 75 percent of the Zero TV audience still have at least one TV, Nielsen said.



The Zero TV audience also skews young with 44.4 percent under the age of 34 and 19.3 percent under 25. And the Zero TV viewer is also more likely to be single, live alone and have no children.

It appears that cord cutters are also cutting the cord in part because they can't afford to pay for a traditional TV service.

"
To some extent, this group is responding to the downturn in the economy which has coincided with the ubiquity of alternative viewing options. For 36 percent, cost was the primary reason for cutting the cord, but interestingly,  'lack of interest' was a close second at 31 percent," Nielsen said.

In a related study, SNL Kagan said yesterday that pay TV providers added 46,000 subscribers in 2012, which was down from 280,000 in 2011 but still suggests that only a small number of consumers are cutting the cord.


Nielsen added that the average American spends more than 41 hours each week "engaging with content across all screens." They spend most of that time (more than 34 hours) in front of a TV and consumers spend three of those TV hours watching time-shifted content on DVRs and other devices.


Analysis:
Will this study finally -- finally! -- shut up the chorus of cord cutting advocates? Probably not. But both the Nielsen study and the SNL Kagan report undeniably shows that the number of people dropping their pay TV service is miniscule and has been for some time. Cord cutting as a trend is a myth, perhaps the biggest technology-related myth the tech and mainstream media has perpetuated in some time.

If there was ever a time when millions and millions of people would drop their pay TV service, it was between 2007 and 2013 when the nation's economy has suffered from a deep recession and chronic unemployment. But only three million additional people decided to cut the cord during that time, according to Nielsen.

That should tell you everything you need to know about the so-called cord cutting phenomenon:

It doesn't exist.

Of course, this isn't the first time that the tech media and the Wall Street analysts were proven wrong on a major tech issue of the day. And it won't be the last. Too often, they think that because they like something -- or their neighbors in New York, Silicon Valley, Los Angeles, etc. like something -- that everyone will like it. But it's not true. Generally speaking, they do not reflect the tastes of the nation. Instead, their opinions are myopic and reinforced by talking to people in the same zip codes.


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