COMMENTARY

What Really Moves the Needle for Cord-Cutting These Days?

• by Wayne Friedman , Staff Writer, January 23, 2024

Is cord-cutting still a thing?

Well, with 50 million or so legacy pay TV subscribers out there -- and 6% to 10% declines per year -- the answer is yes.

However, some analysts may be confused about the reasons why. Number one: A lower total monthly consumer price for a core group of streaming platforms than that of an average legacy pay TV bundle. 

This occurs even among newer virtual pay TV providers that can be offered at a top-level $72.99 a month for YouTube TV, for example.

All that is near the $80 to $90 a month range of more traditional pay TV providers -- cable, satellite, and telco.

And if that doesn't do anything to move consumers, consider if they spent the money on just four to five individual premium streaming services for around $50 to $70 a month. Yes, there are surely savings of $10 to $20 a month.

But perhaps that incentive value is declining to some extent.

Perhaps other considerations are now major factors in terms of which streaming to choose: TV commercials.

A recent survey from HarrisX said “as more services embrace advertising models... cutting the cord to ‘avoid commercials’ is not a major motivating factor to stream.

So this doesn't make a difference now?

What do TV streaming marketing executives now do with all the core-marketing attributes streamers have built over the years -- like regularly scheduling four-to-six minutes of advertising messages per hour in content versus the 15 minutes to 18 minutes of ads and other non-content messaging on linear TV?

The focus now is on those FAST channels (Free Ad Supported Television) as well as those lower subscription-priced ad-supported streaming models.

And look at what all that brings: Netflix resumed its major growth in terms of added subscribers in the U.S. over the last few quarters -- as well as industry estimates that it could get to around $3 billion by 2025 from ad revenue.

With consumers now shrugging their shoulders over advertising content, perhaps now marketing tags like Netflix's “Basic With Ads” named ad-option should be dropped.

It's just basic stuff now.