Biggest Video Consumers Most Likely to “Fray Their Cords” with Cable Companies, Leading to Billions in Potential Losses

LIVONIA, Mich.--(BUSINESS WIRE)--The biggest consumers of video are the most likely to limit their paid TV viewing and subscriptions, according to a national study by Market Strategies International. These cost-conscious and technologically savvy “cord fraying” consumers are becoming more targeted in their video-viewing habits, potentially costing cable operators billions of dollars per year in lost revenues.

“Cord frayers are dissatisfied with their cable companies and can now do business with those companies on their own terms”

“Cord cutting,” or the complete cancellation of paid TV services by consumers, was primarily driven by the economic downturn, and many cord cutters returned to paid TV when their family finances allowed. However, while “cord fraying”—cancelling and/or downgrading pay TV subscriptions and decreasing pay-per-view (PPV) usage—was also fueled by the economic downturn initially, it has spread like wildfire because of easy to obtain and use technological advances.

“These technologies are simple to use so few cord frayers return to their previous viewing habits,” said Randall Hula, vice president of the Communications division at Market Strategies.

He added that cord frayers are consuming video through tablets, smartphones and computers rather than their televisions, and are more likely to use a Blu-Ray player and services such as Hulu, Netflix and Amazon Prime to view movies, TV series and children’s programming.

“The consistent themes among cord frayers are that they are video-heavy and technologically savvy consumers who are choosing products and services that allow them to view the content they want, when and where they want it,” said Hula. “These are exactly the people who, in the past, drove the cable industry’s PPV and premium channel revenues, and they’re being lost to new ways to view.”

The average cord frayer surveyed by Market Strategies reported a $42 monthly savings on their cable bill by cancelling and/or downgrading subscriptions and decreasing PPV usage. As alternatives become more ubiquitous and even easier to use, the potential exists for cord fraying to become more widespread, costing cable operators billions in annual revenues.

“Cord frayers are dissatisfied with their cable companies and can now do business with those companies on their own terms,” said Hula. “Cable providers are hanging on to a portion of cord frayers’ business thanks to some content that consumers can’t get anywhere else, but the revenue these customers are taking elsewhere is overwhelming.”

About the Study

Market Strategies interviewed a national sample of 926 consumers ages 18 and older from May 22-28, 2012. Respondents were recruited from the Authentic Response opt-in online panel of US adults and were interviewed online. Due to its opt-in nature, this online panel (like most others) does not yield a random probability sample of the target population. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of all survey questions upon request.

About Market Strategies International

Market Strategies International is a market research consultancy with deep expertise in communications, energy, financial services, healthcare and technology. The firm is ISO 20252 certified, reflecting its commitment to providing intelligent research, designed to the highest levels of accuracy, with meaningful results that help companies make confident business decisions.

Market Strategies conducts qualitative and quantitative research, and our research specialties include brand, communications, customer experience, product development, segmentation and user experience. Founded in 1989, Market Strategies consistently ranks as one of the 25 largest global market research firms, according to an annual report published in Marketing News. Read Market Strategies’ blog at FreshMR, and follow us on Facebook, Twitter and LinkedIn.