Eye catching numbers make great headlines. That’s probably why so many outlets picked up the big numbers that market research firm eMarketer reported in July. In its latest project, the market research firm pegged the number of cord cutters at 33 million adults, or about 13 percent of the population.
But that figure lacks an understanding of the trends and where the media business is headed.
While traditional pay TV like cable or satellite subscriptions have declined, the amount of households connecting to vMVPDs (virtual multichannel video programming distributors) through ad-insertable OTT subscriptions has covered most of this 33 million deficit. In other words, Americans aren’t cutting the cord, they’re transitioning from one model to another.
Moreover, cord cutting is a misnomer if the home continues to maintain an internet connection. The majority of people eliminate television service because of cost. But they continue to maintain an internet connection commonly provided by a cable or teleco company.
If a home chooses to move away from an vMVPD provider for TV, they have two OTT (over-the-top) options too choose: ad-supported or non-ad supported TV.
The non-ad supported is called SVOD, which are subscription-based services such as HBO Now, Amazon, Netflix and Hulu. Great viewing, but they shouldn’t be part of the conversation because they can’t reach voters.
For ad-supported content, it’s broken into 3 groups: connected devices (Roku, smartTVs), on-demand internet services aVOD (tubi TV) and vMVPD (virtual service providers like Sling TV, PlayStation Vue or skinny bundles). This mix is a combination of paid and free services, yet all allow advertising within the content.
The majority of people that fall into the cord-cutting category, subscribe to multiple services. This even crosses over to current paid vMVPD subscribers. In fact, many choose to layer on additional services that offer additional content.
Cord cutting is the next chapter in media fragmentation. It’s reminiscent to the introduction of Fox Broadcasting back in 1986 as a challenge to the Big 3 networks. Now, it’s just another part of the media plan.
Over the years, new disrupters have been introduced, such as cable TV, internet/social and now streaming services (OTT). Yet the fundamentals remain the same: prioritizing scale, ad insertion, cost and the ability to persuade a target.
The marketplace will continue to fragment as more solutions develop and consumers demand more original content. The key for campaigns and groups is to find a company that offers scale across multi-screens and extends your reach into set top box (STT) and OTT solutions. That way missing voters is never a concern.
Tim Kay is the VP of Political Strategy at NCC Media, a company jointly owned by Comcast, Cox and Spectrum.