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 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¡±¨Ccancelling and/or downgrading pay TV subscriptions and decreasing pay-per-view (PPV) usage¨Cwas 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 Telecommunications 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.¡±
