Pay TV providers have experienced transitional shifts, predominantly over the last five years, as consumers change how they watch their content. Internet video has redefined how consumers get content and has spurred the cord cutter and cord never segments. These groups of consumers have either abandoned subscription-based Pay TV or have never paid for TV.
Consumers Define How They Get Content
The consumers that have never had a TV subscription—the cord nevers – are of particular interest to Pay TV providers. Knowing the demographics and motivators for this segment is critical to understanding the group and how to bring it into the fold.
Cord nevers are generally in the coveted 18-34 demographic—77% of 18-34 year olds are more likely to be cord nevers.[i] They are college students and graduates generally with less disposable income. Mobility defines their habits, which indicate a preference to consume content on their laptops, tablets, or smart phones. In short, they are savvy with technology and extremely budget-conscious.
Cord nevers are motivated by two influences: access to broadband and choice. Specifically, this group sees Internet access as a necessity and Pay TV as a luxury. In 2014, 14% of broadband households did not have a traditional Pay TV package, up from 9% in 2011.[ii] And in terms of choice, they prefer access to specific content as opposed to a wide assortment of channels. Cord nevers also want to watch content on their device of choice, whether that be on a mobile device, laptop, or Internet-capable device (Roku, AppleTV, etc.), or television.
Meeting Cord Nevers Where They Are
The cord nevers segment of consumers is still growing and will continue to shape the Pay TV industry trajectory with over-the-top (OTT) content. In recent months, HBO, CBS, and other content providers have offered their content directly to consumers via mobile applications and monthly subscriptions. Similarly, many providers are offering apps through which consumers can stream a number of networks live. In so doing, they are making content affordable for cord nevers and satisfying their desire for choice.
Given their influence and potential purchasing power as they age and accumulate more disposable income, it is important to develop business strategies that meet the cord nevers where they are spending their dollars. No matter how a Pay TV provider chooses to address this growing segment, offering this segment of consumers what they want at prices they can sustain is key to turning “cord nevers” into “cord lovers.”
[i] http://www.telecompetitor.com/reasons-for-video-cord-cutting-may-be-different-than-for-cord-nevers/
[ii] http://tdgresearch.com/tdg-14-of-broadband-households-now-without-traditional-pay-tv/