Based on responses from 3,385 US consumers and information from public filings, consulting firm cg42 estimated the trend could cost the pay-TV industry as much as $5.5bn in lost revenues this year.
Comcast, which until last Thursday was involved in a bidding war with Disney to acquire the assets of Twenty-First Century Fox, is expected to lose 7.2% of its 21.3 million subscribers in 2018 – a potential financial loss of $1.6bn for the company.
AT&T’s DirecTV is also expected to be hit with 4.8% of its 24 million customers cutting the cord, resulting in lost revenues of a potential $1.2bn.
“As the process of finding alternative paths to content gets easier and easier, people are acting on the frustrations they have with traditional providers and leaving,” said Stephen Beck, cg42 managing partner and lead author of the study, in comments reported by MarketWatch.
He added that customers were most frustrated with being unable to get what they considered competitive or reasonable rates, new customers getting better deals than existing ones and being “nickeled and dimed” with multiple fees and charges.
Millennials and Generation X consumers are leading the trend, the survey found, as it noted that a full 18% of millennials (defined as those aged 22 to 37) could be described as “cord nevers”, or those who have never subscribed to pay-TV.
Out of the 63% of millennials who currently subscribe to pay-TV services, around half (52%) said they have considered cutting the cord in the last 12 months.
A similar proportion (51%) of the 77% of Gen X who subscribe to pay-TV shared that opinion, but loyalty remained higher among baby boomers and older viewers among the so-called silent generation.
Just 35% of baby boomer paid-TV subscribers, or those born between the late 1940s and mid-1960s, said they have considered cutting the cord in the last 12 months – and this sentiment dropped further among the silent generation (26%).
And in another unsettling finding for the industry, cg42 revealed that 79% of former subscribers said they were happy with their decision to cut the cord, with only 5% saying they had regrets and would go back to pay-TV.
Sourced from cg42, MarketWatch; additional content by WARC staff