What Are Cord Cutters?
While no cords are actually harmed in the process of cord cutting, cable and satellite TV providers are taking quite the hit as millions of Americans are saying “thanks, but no thanks” to excess cable channels and high monthly payment—this new generation of media consumers are called “cord cutters.”
What are cord cutters? Cord cutters are TV viewers who have ditched their traditional cable TV provider often in favor of relying on TV streaming services. And they’re growing in number. In fact, a 2021 Forbes report shares that the total number of cord cutters has (drumroll, please) tripled in just seven short years.
With an estimated 50.4 million1 cord cutters making waves across the country, it raises the question as to why. This blog will dive deep into the motivating factors behind this decision as well as what this means for marketers who are suddenly having to revamp the way they reach their audience.
Cord Cutting: The Cable Alternative
While cord cutters are certainly dismantling the TV business as we know it, they aren’t the only ones having a hand in the action. There are a couple of other categories of people who are opting out in their own way, causing cable and satellite subscriptions to plummet even further.
The cord cutting comrades? Cord trimmers and cord nevers.
- Cord trimmers – Instead of severing ties entirely, cord trimmers are in favor of minimizing their cable or satellite expenses each month by scaling back on channels and services they don’t need or want. Cord trimmers may simply be opting for a reduced channel list or are cutting back on expenses while also adding a streaming service alongside their reduced cable subscription.
- Cord nevers – This anti-cable community accounts for a whopping 31 million Americans who have never had a cable or satellite subscription before.2 Not surprisingly, this trend can be observed mostly amongst younger generations. 90% of Americans between the ages of 25 and 34 use a digital streaming service instead of a traditional cable TV package.
Whether they’re patching the hole in their wallets or enjoying the convenience of streaming their favorite TV shows 24/7, there are a number of benefits associated with cord-cutting that the American TV-viewing population is taking advantage of. Read on to catch the specifics.
Benefits of Cord Cutting
What’s the root cause behind the cable boycott? It’s hard to put a finger on just one particular benefit since there are many reasons why cord cutters, cord trimmers, and cord nevers are moving away from traditional TV viewing.
Here’s a breakdown of what could be some of the primary factors contributing to this trend:
- Cost efficiency – Perhaps one of the most appealing factors motivating cord-cutters to bid farewell to their cable or satellite subscriptions is the financial savings that come along with it. Depending on the provider and the number of channels, the average cable bill can range anywhere from $45 to $130 each month.3
The cost per month for a streaming TV service will also vary depending on the package selected but could cost as little as $4.99 per month (Apple TV+) or as much as $15.99 per month for the premium tier at Netflix.4 Whether you’re a math whiz or not, it’s obvious to see how much money you could potentially put back in your pocket by opting for a streaming service instead.
- Multi-way streaming – Another benefit of streaming services for multi-person households is the ability to access shows and movies from a variety of different devices. This allows everyone in your home to tune into their favorite channels without having to fight over who gets control of the remote at a certain time. Plus, downloadable series and movies allow for on-the-go entertainment whenever you’re away from your home or unable to connect to WiFi.
- Diverse range of services – For cord cutters, having access to hundreds of channels through cable is just not as alluring as having access to just favorite shows at the touch of a button. That’s why they’re likely to find the diverse range of streaming services to be an ideal replacement for broadcast TV. Instead of overpaying for channels they hardly ever use, cord-cutters can handpick their favorites from a variety of options including Netflix, Hulu, Disney+, to name a few.
What’s more, the algorithms behind several streaming services offer a degree of customization that some users may find attractive. By tailoring the menu to match viewing behavior and trends, users can spend less time browsing and more time connecting with shows and films recommended for particular tastes.
- Local access – There may be some hesitance amongst TV viewers to drop cable and satellite subscriptions entirely because they worry about losing access to local channels and live sports. Fortunately for cord-cutters, some services such as Hulu + Live TV offer a bundle, including channels like ABC, CBS, ESPN, and FOX, making it easier to make the switch without sacrificing access to TV you love.
What Cord Cutting Means for Marketing
Aside from offering TV viewers lower monthly bills and more convenient binge-watching, the cord-cutting is also responsible for some big changes in the world of marketing and advertising.
With fewer people tuning into cable and satellite TV, advertisers are having to find new and more efficient ways of reaching their target audience via streaming services instead.
The answer? OTT and CTV advertising.
- OTT, or over-the-top streaming, is the digital video content that viewers with internet access can tap into from a number of different devices. You’re likely familiar with services like Netflix, Hulu, or Amazon Prime Video but you may not have realized that they fall under the category of OTT media.
- CTV, or connected TV, is similar to OTT streaming but often relies upon a special device in order to display video content if your TV does not already have built-in capabilities. Common CTV devices include Roku, Chromecast, Amazon Fire TV, Apple TV, and game consoles like Xbox and PlayStation.
Instead of displaying ads during a traditional TV broadcast, media buyers are having to take advantage of opportunities such as in-stream ads, interactive mid-stream ads, and home screen placement ads to display their brand’s message.
How to Capitalize on Cord-Cutting Trends
Although digital marketing strategists have been forced to adapt on a dime to a new channel of advertising, they may find it to be more effective than linear TV advertising.
Here’s how marketers are taking advantage of OTT and CTV advertising.
- Target a new and more specific audience – Brands hoping to capitalize on OTT and CTV advertising trends may use them as an avenue through which to reach a newer, younger audience. As mentioned earlier, the younger generation accounts for a majority of cord-cutting trends. Therefore, companies hoping to engage with a younger demographic may be able to do so more efficiently with this particular advertising channel.
Plus, it lets media buyers gather valuable information about audience behaviors, popular TV-viewing times, and viewer interests, allowing them to target their ads more precisely.
- Gain insight into how your ads are performing. – There are a number of metrics marketers can tap into with CTV and OTT advertising that allows them to have a better understanding of how their ads are performing.
Whether it’s seeing how many times your ad was watched to completion or how many viewers visited your website after your ad was displayed to them, businesses can use this data to optimize their marketing campaigns and make adjustments when necessary.
- Spend marketing dollars more efficiently. – By combining both audience insight and unique CTV and OTT key performance indicators (KPIs), marketing teams can not only make more informed advertising decisions but can also find ways of spending their marketing dollars more wisely as a result.
When you’re able to place your advertisements in front of audiences who are more likely to be interested in your product or service, there’s a greater chance your campaign will yield a higher return on investment.
How is your brand responding to the shifting patterns in TV viewership? If you haven’t yet considered switching to an OTT and CTV advertising approach, now may be the time to do so. Read our guide on CTV viewership to learn more.
Update Your Marketing Strategy With Power Digital Marketing
Whether you’re committed to cable or are considering making the switch to streaming video content instead, come back to this article anytime you need help guiding your decision. If you’re in the marketing industry, take the insights from these cord-cutting trends and be sure to add them to your advertising toolbelt.
It’s time to cut the cord with outdated, inefficient marketing tactics and start building new ties with Power Digital Marketing instead. Specializing in paid media, affiliate, content marketing, and more, the experts at PDM are committed to tailoring strategies that work for each brand’s unique needs and goals.
See why clients like Airbnb, Peloton, and Casper count on us to help shape their marketing plans and unlock their full potential. Get your proposal any of our digital marketing services today.
- Forbes. The Number Of Cord Cutters And Cord Nevers Has Tripled Since 2014. https://www.forbes.com/sites/tonifitzgerald/2021/05/27/the-number-of-cord-cutters-and-cord-nevers-has-tripled-since-2014/?sh=6b80890e1f12
- Business Wire. Over 30 Million Americans Have Never Paid for Traditional TV Service – MRI-Simmons. https://www.businesswire.com/news/home/20190409005686/en/30-Million-Americans-Paid-Traditional-TV-Service
- Nerd Wallet. How Much Is Cable per Month? https://www.nerdwallet.com/article/finance/how-much-is-cable-per-month
- Money Geek. Comparing the Best Video Streaming Services for Your Budget https://www.moneygeek.com/financial-planning/resources/best-streaming-services-on-a-budget/
- PwC. Consumer Intelligence Series: I stream, you stream. https://www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/i-stream-you-stream/pwc-videoquake-i-stream-you-stream.pdf
- Finances Online. 54 Compelling Cord-Cutting Statistics: 2021 Market Share Analysis & Data. https://financesonline.com/cord-cutting-statistics/