The Rise of Cord Cutting 

  • October 12, 2020

  • Eyes4Research

Many Americans are canceling their cable, turning to streaming services, or DTV for their entertainment needs. Referred to as cord-cutters, these consumers make up 44.3 million US households as of 2020, according to NoCable. As the television industry evolves, so have consumer viewing preferences, as cost and customization become of utmost importance. 

Benefits of Cord Cutting

  1. Options to Fit your Needs 

From streaming services and devices, HDTV antennas, and smart televisions, there are several viewing options to fit the personal needs of consumers. With streaming service originals, live television shows, and customizable content plans, consumers can choose a viewing method that works within their price range, lifestyle, and content preferences. Many consumers subscribe to multiple streaming services, gaining access to thousands of shows on a plan that can be upgraded or canceled. Others may purchase a device or antenna, paying upfront for all the content they need. 

2. Cheaper than Cable

With the average pay television service costing $103 per month, cord-cutting can save consumers up to $1236 a year, according to The Simple Dollar. From the one time payment of a streaming device or antenna to monthly subscription services, cutting the cord remains the most economical option for households looking to spend less on television. Though prices depend on the number of streaming service subscriptions and monthly internet plan, there are options for every price range and entertainment preference. 

Limitations of Cord Cutting 

  1. Increased Streaming Prices

With the popularity of streaming services skyrocketing in the last few years, prices have also increased as companies must pay a hefty cost to obtain licensed content from providers such as NBC, ViacomCBS, and Warner Brothers. Almost all streaming services, including Hulu, Netflix, and Youtube TV, have raised their prices over the past two years. Though monthly subscription prices may depend on the number of users and package size, streaming service price hikes show no signs of slowing down as competition continues to increase. 

2. More Expensive Internet

Most pay-TV services offer bundles for television, internet, and home phone. By getting rid of cable, cord-cutters may have to pay more for the same speed internet, as they do not qualify for the bundle deals. Though these prices vary by provider, the cost of the internet, in addition to monthly subscription services, can be just as costly as keeping cable. 

3. Reliabilility

Despite paying less per month, unreliable wifi or broadband connections may affect one’s viewing experience. Seeing that these alternative television services rely on external factors such as the internet or one’s proximity to broadcast towers, weak signals may cause buffering, poor image quality, or the inability to load content. Consumers must also consider the number of users they have, as using too many accounts at once may result in connectivity issues. 

The Pandemic’s Affect on TV

With the pandemic causing growing financial strain on millions of consumers around the United States, over 6 million households have cut out pay-TV in 2020, as reported by TechCrunch. These numbers may rise over the next four years, as eMarketer forecasts the number of non-pay TV households to increase to 68.2 million by 2024. In addition to decreased consumer spending, television production companies have suffered due to the pandemic, postponing shows, and movies due to safety concerns. As companies and consumers adapt to the new normal, the future of at-home entertainment remains uncertain. Despite this, cord-cutting has the potential to accelerate the evolution of television, creating a more personalized and cost-effective way to consume media.