Last year in this space I discussed how trends from The Home Technology Monitor™, a syndicated research service from GfK’s Media and Entertainment team, challenged my skepticism about cord-cutting being a substantial issue. I was very doubtful that people were abandoning pay TV for online services and putting the traditional TV model in imminent danger of collapse. However, the data showed that from 2011 to 2012, homes with broadcast-only reception increased a statistically significant level for the first time in over five years; maybe there was something to worry about.
This year, I’m here to report that just-released 2013 data from The Home Technology Monitor™ is confirming the higher level of broadcast-only homes. Although not a significant increase over 2012, it is showing another directional increase – we’re seeing 19.3% of TV homes reporting broadcast-only reception, compared with a level of 17.8% in 2012, and as low as 14% as recently as 2010. Projected out, this means that in 2013, roughly around 22 million homes rely only on over-the-air broadcast rather than pay TV service.
As we saw last year, broadcast-only levels are even higher among minority and lower-income homes, as well as with younger householders; these groups have all have seen higher-than-average increases in broadcast-only reception in recent years.
But, as with last year, I have yet to put more than a toe in the cord-cutting pool and its popular implication that online viewing is driving this behavior. Consistent with measurements the two previous years, our new data show that only about one third of broadcast-only homes truly did cut the cord – they cancelled pay TV service at their current household. Few broadcast-only homes report Internet service connected to their TV set; when asked why they cancelled TV service, the overwhelming majority (over 60%) cited cost-cutting; far fewer mentioned cord-cutting because of online viewing options.
As we mentioned last year, these cost-conscious TV homes may be reaping some of the benefits of the transition to the digital TV (DTV) broadcast standard, making use of that enhanced digital broadcast signal and its better video and audio quality. Another feature of digital broadcasting is the numerous over-the-air digital side channels, offering a variety of additional programming in addition to the main broadcast channels. In larger markets, this means there may be over 20 total channels via over-the-air (OTA) broadcast signals
That being said, there is no denying that online or streaming video does play a role, and one that continues to creep up into the mainstream. But is it currently the primary driver of people moving back to broadcast-only reception? Our data still don’t point to that conclusion.
I continue to wait for the economy to really gain traction and pick up, which will be the real test if people maintain their broadcast-only status even as economic concerns lessen. That’s when I’ll decide if I’ll pull my toe out and jump in the deep end of the cord-cutting pool.
After this blog was first published, I received a number of comments questioning our 19% number, or asking for further explanation as to why our number was so much different from those published by a certain media currency provider or other sources. Here’s a brief recap of my standard response:
* First and foremost, different companies doing different surveys using different methods and samples end up with numbers that are different – this is not unexpected.
* Our 19% number is drawn from one of the longest and most reliable media ownership surveys in the market. Our panel is recruited using traditional probability sampling techniques and represents about 97% of US homes, including Spanish-speaking, cell-phone-only, and non-Internet homes. We are confident our sample is much more reliable than any that rely on volunteer online panels or on telephone samples.
* As far as we can tell, the currency number typically used for comparison to ours is based on an in-home enumeration in peoplemeter markets – in other words, only among homes that have agreed to be metered in the top 50 markets. How different these homes may be from non-cooperators or homes in the other 160+ markets is unknown to us.
* Numbers from some other sources conflate traditional TV reception (broadcast or pay TV) with online viewing, a policy we disagree with. These sources reduce the number of broadcast-only homes if those homes are capable of watching online video.
* Lastly, we do offer our clients multiple ways to look at these data. Our 19% number is our historical trend – that assigns homes without reception reported to broadcast. However, other ways we can define broadcast-only is to leave “don’t knows” in a separate category – in which case the proportion of broadcast-only TV homes decreases to 15%. Or, if we go against our preference and offset this number further by homes capable of viewing online, then our broadcast-only number could conceivably be as low as 13%.
The bottom line is that savvy researchers understand that there is no “truth” in research, only estimates of the truth; thus, these estimates can be at odds without necessarily being wrong – just different.
David Tice is Senior Vice President, Media and Entertainment, at GfK. He can be reached at firstname.lastname@example.org.