ESPN: Nope, No Cord Cutters Here, Either


It looks as if the prospect of people relying on the Web for their TV content is hitting a real sore spot with traditional media. While some metrics companies like Convergence Consulting Group have projected that hundreds of thousands of customer have already left their cable subscriptions behind, we are seeing metrics ammo being packed and fired back like snowballs in warm weather. It is hard to tell whether they are melting or hitting their mark. Yesterday, ESPN treated the cord cutters as a negligible nuisance that it seemed to swat away like a mosquito. The Disney-owned sportscasting goliath says its figures show that the number of U.S. households that cancel cable, telco or satellite subs but still retain their broadband connection, nets to only .11% of the TV population in the last three months.

This is their math. ESPN cites a Nielsen sample showing .28% who dropped TV service but kept the fat data pipe, a number "offset by a group of broadcast-only households that became subscribers to multichannel TV and broadband" in the quarter. This group of upgraders (ESPN likes to call them 'un-cutters') amounted to .17%. ESPN is quick to add that among the heavy sports watchers who form the company's core audience there was not cord cutting. ESPN also suggests that broadband really is additive, in that five times as many TV subscribers added high speed Internet as cut the cord.

Contrary to trendy wisdom, ESPN chides, whatever incremental cord cutting may be going on is not likely caused by the availability of TV and alternative content via broadband. Their reading of Nielsen data shows that the cord cutters are middle-aged and middle-class economizers rather than hip young digerati who are fleeing their set top box for laptop displays and Web-to-TV connections. According to reports Time warner CEO Glen Britt made a similar claim about the myth of cord cutting, even though his and rival cable companies are watching their subscriber base erode.

Of course the funny part of all this is that on the one hand these TV entities are debunking a phenomenon that on other fronts they actively address with TV Everywhere plans...someday.

As a number of you suggested after our post last week on Frank N. Magid's similar findings of negligible cord cutting, the reality is that even the cable companies see this one coming.

They seem to be in a state of faux denial, saying one thing but trying to stave off the inevitable. I think the question is not whether cord cutting is real this second than it is when it will become real and what is the last thread that may lead a significant number of people to rely solely on broadband? I have to admit that I am much closer to that last few threads than I thought I might be just a year ago. When I missed the ritual viewing Sunday night's 60 Minutes interview with Mark Zuckerberg I was able to get it this morning on the dedicated iPad app. When my fiancé complained that there was not a single holiday TV special or movie on last night, we watched the George C. Scott version of Christmas Carol via Netflix/AppleTV and bought Mr. Magoo's version with its brilliant UPA stylings and Broadway caliber score to watch tonight. Aside from lean-back moments of letting TV live newscasts wash over me as I multitask, I am finding it harder to justify the incrementally increasing cost of the TV service.

Here is a comparative metric I would like to see these same MSOs offer. How much faster is the cable TV part of my monthly bill creeping up month by month without explanation relative to the broadband part of my bill? And why are those trend lines the inverse of my actual use of the two platforms?

3 comments about "ESPN: Nope, No Cord Cutters Here, Either".
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  1. Douglas Ferguson from College of Charleston, December 7, 2010 at 2:08 p.m.

    Had this been written in 2001, the headline would have been "Nope, No DVR Users Here, Either" or if in 2006, it would have read "Nope, No Facebook Users Here, Either"

    Cord-cutting is new, so no one can honestly claim it will or won't grow into a killer phenomenon. But the more the cable flaks say "move along, folks, nothing here," the more I wonder.

  2. Adam Gelles from The AMM Group, December 7, 2010 at 2:37 p.m.

    What we are seeing is that the amount of cord cutting is related to content type and audience segment. That is, some heavy viewers of certain content have a higher propensity to cord cutting. What media cos need to think about is how this usage trend can effect the monetization of inventory. Advertisers meanwhile should think about the impact this insight has on their media-mix by consumer segment.

    Adam Gelles, CEO
    The AMM Group

  3. Matthew Schmidt from Small Planet Public Relations, December 8, 2010 at 4:53 p.m.

    While ESPN and Time Warner attribute audience loss to middle-age and middle class economizers, there are different views. In The New York Times on December 6, (see: Rabbit Ears Perk Up for Free HDTV), a reseller of over the air digital antennas reports a sales jump greater than 25% from 2009 to this year and says, “…his customers were 20-somethings who pair over-the-air and Internet programming,…” Admittedly, the newspaper’s reporting is anecdotal. But you have to wonder if the cable providers have a clear view of who is cutting the cord and why.

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