Over a quarter of US households plan to cut cable TV subs in 2021 | Media Analysis | Business
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If the US cable TV industry thought things couldn’t get much worse than they have in recent years, a study from The Trade Desk is warning that American households are cutting the cord on their cable subscriptions more rapidly than previously reported.
Trade desk US cable 12 Jan 2021
The study by the advertising buyers’ technology platform sampled 2,105 adults in the US and was conducted by YouGov from 4-8 December 2020 on a survey with a total sample size. The survey was carried out online. The figures were been weighted and are said to be representative of all US adults ages over 18. In addition the company carried out an advertiser perceptions online survey of 150 TV advertising planning and buying decisionmakers with an annual TV ad budget of over $5 million. Fieldwork for this survey was conducted from 18-30 November 2020.

The standout finding was that 27% of US cable TV subscribers were planning to cut their subscriptions by the end of 2021. That percentage was nearly double the 15% of cable subscribers who reported cutting the cord in 2020, and significantly higher than what surveys in 2019 had predicted. The Trade Desk added that the Covid-19 pandemic had accelerated consumer behaviours and trends that are defining a new era of TV consumption. It added that more US consumers were working at home, many under increased budget pressure, and with the broader availability of streaming services, streaming consumption now accounts for 68% of TV viewing compared with 28% for traditional TV viewing.

Worryingly, the study found that even live sports couldn’t keep viewers tethered to traditional TV as more US households turn from cable to streaming platforms to watch their favourite teams. After a pause in live sports caused by the pandemic, almost 39% of sports viewers were found to be now watching live sports events via connected TV (CTV) such as ad-supported streaming and social media platforms. Only 30% of US. consumers cited live sports as a reason for maintaining a cable TV subscription. This was significantly down from the 60% that cited live programming, including sports, just nine months previously.

“Covid has accelerated cord-cutting trends that were already underway, to a point where less than 50% of US. households today have a cable subscription,” said The Trade Desk chief revenue officer Tim Sims commenting on the research. “It’s not because US. consumers have fallen out of love with TV, but that there are now more convenient ways of consuming it. That even applies to traditional cable mainstays, such as live sports “As more broadcasters launch and expand their streaming services, these gaps are only going to widen.”

As Americans shift to CTV, there’s a limit to their tolerance for subscription services. Fifty-one% of US consumers are unwilling to spend more than $20 on streaming subscriptions, according to the survey. Furthermore, US TV viewers are more than five times more likely to prefer free or low-cost streaming TV with ads, over streaming services with higher monthly subscription fees with no ads – 72% versus 14%. What’s more, when looking for a new show to watch, consumers are more than twice as likely – 63% versus 26% – to choose free content with ads versus services with a higher monthly fee with no ads.

In a call to action, the Trade Desk warned in its research that every aspect of the decision-making process of TV advertising - including measurement, frequency and creative – would have to have to evolve as more consumers shifted to CTV. “The TV ad business is at a tipping point. Advertisers can reach more households via CTV than via traditional linear TV for the first time. That trend is not reversing,” Sims added. “Digitally savvy advertisers recognise the advantages of CTV advertising, including precision measurement, an audience versus content focus, and the ability to apply data to all aspects of their TV campaigns. Many are embracing these opportunities, and that also means transforming some of the cultural norms of this industry, including how we think about skills development and ad-buying processes such as the upfronts.”