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Cord Nevers and How They Impact CTV/OTT

October 28, 2021
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In the age of streaming, the term “cord cutter” gets thrown around quite a bit. While cord cutters are customers who have made the switch from traditional cable TV to streaming-only—what about cord nevers?

“Cord nevers” are part of a unique demographic that continues to grow with each passing year. This evolving market contributes to a number of changes in the television industry, particularly when it comes to new devices, services, and marketing. 

If you’re interested in learning more about the powerful impact cord nevers have on CTV and OTT, read on!

What is the Difference Between Cord Cutters and Cord Nevers?

First and foremost, let’s break down these two television buzzwords:

  • Cord cutters What are cord cutters? Cord cutters are customers who, at one time or another, have paid for a traditional cable plan. This group is referred to as cord cutters because they have since “cut the cord” and abandoned their cable plan—usually in favor of streaming services or internet-based cable alternatives.
  • Cord nevers – On the other hand, we have an emerging group of viewers who have never paid for a cable plan: cord nevers. Cord nevers are typically younger people who lean more toward streaming services for their entertainment needs. While they may have grown up in a household with a traditional TV service, they have never paid for it themselves. 

How Big is the Cord Never Population?

You may be wondering just how influential the cord never population really is. 

The answer: quite a bit, and they’re only gaining numbers as time goes on. 

While older generations may still rely on traditional cable, millennials and gen z’ers are moving toward a streaming-only version of entertainment. Simple math will tell you that these younger generations are going to make up more and more of the TV industry’s customers in the near future, especially as these individuals grow up, find jobs, and begin living on their own.

In fact, as of 2019, cord nevers account for approximtely 12% of the adult population—a whopping increase of 9% from 2017. This brings the total number of cord nevers in the U.S. to about 31 million (and keep in mind these numbers are from three years ago). With such drastic growth in a short amount of time, it’s safe to say that cord nevers are quickly becoming a vital demographic in the entertainment world. 

The average age of these cord nevers is 33 years old with a median income of $52,800.1 This proves that younger, cable-defying generations are becoming the adult professionals who once paid for pricey cable plans; but times are changing.

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What are CTV and OTT?

Now that we’ve painted a clear picture of who cord nevers are, let’s move on to the next topic at hand: CTV and OTT:2

  • CTV – CTV is an acronym that stands for connected TV. A connected TV refers to any device that’s either connected to or built inside a television, and supports internet-based video streaming. Examples of CTV devices include Roku, Amazon FireStick, and Apple TV. 
  • OTT – OTT refers to the method through which this streaming content is delivered to your streaming device. This means that services like Netflix, Hulu, and HBO Max all fall into the OTT category. Cable alternatives, like Fubo TV and Hulu + Live TV, are considered OTT services as well. Any platform that utilizes a streaming or video-on-demand strategy can be considered OTT.

The History of OTT and CTV

Before we can dive into the current trends in OTT and CTV viewership, let’s first examine the brief history behind each of these services:3

  • OTT – OTT has evolved from a fraction of entertainment methods to one of the biggest industries in the world. OTT began with humble origins, like downloading a video to your iPod Nano or renting a DVD from Netflix. In the mid-to-late 2000s, companies like Netflix and Hulu began offering streaming services. Later on, a number of major corporations began dipping their toes in the OTT water, thus leading to new streaming services like Disney+ and Amazon Prime Video.

    Today, consumers have a plethora of OTT subscriptions to choose from, which has led to a diverse market and little unification under the streaming umbrella. Despite having to pay for a number of different services, many cord nevers still prefer this option to paying for one cable plan. 
  • CTV – As the cord never population grows, more and more companies are joining the race for the best CTV device. The first major example of CTV can be attributed to TiVo’s record-and-watch-later model. Gaming consoles, such as Xbox and Playstation, also dominated much of the CTV world before streaming became mainstream.

    With the rise of OTT subscription services, the need for devices that support this content began to skyrocket. Today, nearly all television companies offer their own version of a smart TV, along with plug-in devices from Roku, Amazon, Apple, and more. In 2021, an estimated 82% of Americans own at least one smart TV (or another CTV device)—up from only 30% in 2011.4

The bottom line – OTT and CTV go hand-in-hand, and the relationship between these two entertainment methods have lead to their individual success. 

The Relationship Between Cord Nevers and CTV/OTT

While cord cutters laid the groundwork for the rise of CTV and OTT, cord nevers are building a lasting future for these methods of entertainment. With traditional cable, the prospect of “potential cord cutters” gives content providers incentive to keep their existing customers. This may mean offering deals, requiring long-term contracts, and including OTT services within their packages.

Cord nevers, on the other hand, make it difficult for a traditional cable company to reach new customers. While this is bad news for the cable industry, it leaves plenty of room for CTV and OTT companies to flourish.

Influence on OTT

With OTT services, there are several ways in which cord nevers can be drawn in:5

  • The number of acquired programs they offer
  • The original content they create
  • Offering limited commercials or an ad-free experience
  • The ability for viewers to watch programs on their own time
  • The ability to pause, rewind, and fast forward
  • The binge-watching phenomenon

Alternatively, there are certain drawbacks of the OTT service model that can influence whether or not a cord never chooses to subscribe, such as:

  • A high monthly bill
  • Lack of variety among content
  • Having too many OTT subscriptions already
  • Not offering a free trial
  • Too many ads
  • Incompatibility with their device (for example, Netflix cannot be accessed via a Nintendo Switch gaming system, but Hulu can be)

With this feedback, OTT services can adjust their streaming service subscriptions accordingly in order to maximize their audience. While cord cutters and cable viewers may be influenced by these factors as well, it is the cord never population that truly understands the subtle nuances that can turn a streaming service into a household staple. 

This demographic has grown accustomed to convenience, and providing a seamless streaming experience will help companies gain a larger audience of cord nevers. After all, these customers have never been tied down with contracts or cable box installations, and with so many streaming options out there—cord nevers often have little commitment to individual subscriptions. 

CTV

CTV devices play a different role in the lifestyle of a cord never. While customers can build a repertoire of many different OTT services, the CTV they choose is often a much longer commitment. 

For this reason, it’s vital that CTV companies know how to market themselves as the top-tier option for streaming devices. Benefits that cord nevers may look for in a CTV device include:

  • Compatibility with all streaming services
  • An easy-to-use interface
  • Universal remotes and smartphone remote apps
  • A large, HD screen (specifically for smart TVs)
  • Easy set up (compared to the complications of purchasing a cable box)
  • In the case of gaming consoles, the ability to game and watch TV from the same device

It’s clear that CTV devices are replacing traditional televisions, and they can essentially corner the market as the demand for streaming devices increases each year. That being said, it’s important for CTV companies to value quality and compatibility when marketing their products—especially since cord nevers have so many smart devices to choose from. 

Brand loyalty and reputation may also help, with companies like LG and Samsung making waves in the smart TV industry. That being said, long-time CTV manufacturers, like Roku, have built their success by getting in on the ground floor. As time goes on, it’s crucial that CTV companies understand the unique needs of customers who have never relied on cable, since they tend to be pickier about the smart devices they purchase. 

Power Digital Marketing: Helping You Make an Impact

Now that we know how cord nevers impact the CTV/OTT industry, it’s time to refine your strategy to connect with this growing demographic. 

Fortunately, that’s what Power Digital Marketing is here for. Through our thorough research, groundbreaking strategies, and personalized approach, our digital marketing agency can help CTV and OTT companies navigate this changing industry more effectively. 

To find the best approach for your business, learn more about our digital marketing services today!

 

Sources:

  1. Telecompetitor. Cord Never Research Finds 31 Million Haven’t Paid for Pay TV, But That May be Changing https://www.telecompetitor.com/cord-never-research-finds-31-million-havent-paid-for-pay-tv-but-that-may-be-changing/ 
  2.  Oracle. Connected TV (CTV) and OTT and Linear TV  https://www.oracle.com/cx/advertising/measure-campaign-effectiveness/ctv-vs-ott/ 
  3. Mountain. The History of Connected TV Programs. https://mountain.com/the-history-of-connected-tv-platforms/ 
  4. National Interest. 80 Percent of U.S. Households Have At Least One Smart TV (Or Smart Something). https://nationalinterest.org/blog/techland/80-percent-us-households-have-least-one-smart-tv-or-smart-something-187418 
  5. Kinesso. The History of OTT So Far.  https://kinesso.com/the-history-of-ottso-far/ 

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