TDG: Pay-TV Refugees Now Account for 13% of US Broadband Households

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Though General Video Subscriptions Remain Flat to Slightly Negative, A Growing Number of Broadband Households are Doing without Pay-TV

New research from TDG finds that 13% of broadband subscribers – some 11 million households – do not subscribe to cable-like pay-TV services. TDG’s latest report, PayTV Refugees: A Primary Profile of Cord Cutters and Cord Nevers, offers a detailed profile of this small but growing segment of home entertainment consumers.

“According to our tracking research, the percent of broadband households doing without pay-TV has increased from 9.5% in late 2010, to 11.2% in late 2011, to 12.5% today,” notes Michael Greeson, TDG founding partner and director of research. “Though pay-TV operators rightly argue that OTT’s impact on basic video subscriptions has been negligible, when one focuses exclusively on broadband subscribers – those most likely to have access to OTT services – the numbers tell a different story.”

TDG separates Pay-TV Refugees into two familiar segments: Cord Cutters (broadband users that once subscribed to pay-TV but no longer do) and Cord Nevers (broadband users that have never subscribed to pay-TV). Though they have share obvious dispositions (they both describe to broadband but not pay-TV) these two segments exhibit radically different profiles. Cord Cutters, for example, are a bit older, enjoy higher annual incomes, and are more likely to have children under 18 living in the home. Conversely, almost a third of Cord Nevers are between the ages of 18 and 24, more than half have annual incomes under $30,000, and only one-fifth have children under 18 living in the home.

While TDG expects the number of both segments of Pay-TV Refugees to increase over the next five years, it is Cord Nevers that comprise the most immediate challenge for pay-TV operators. The logic, notes Greeson, is fairly straightforward. Today’s young consumer is more technologically sophisticated than their predecessors, especially when it comes to entertainment. Coming of age in a world of net-connectable screens and online services like Netflix and Hulu, these pay-TV prospects are fully aware the existence and costs of such services. They understand the benefits and limitations of the online alternatives. “Imagine you were a 20-year old struggling to find a job (much less ‘the’ job), moving out on your own and for the first time faced with paying your own bills. Spending $80-$100 per month for a pay-TV service, though enjoyable, is more of a luxury than a necessity. And by combining free over-the-air broadcasts with a couple of $8 per month OTT subscriptions and free online video, they can easily create an imperfect but sufficient substitution solution. And many will.”

TDG’s new report, PayTV Refugees: A Primary Profile of Cord Cutters and Cord Nevers offers a detailed research-based profile of two contemporary service segments of relevance to the pay-TV and over-the-top video industries. Featuring demographic and behavioral profiles of both segments, the report offers a unique glimpse into the homes and minds of consumers that, for very specific reasons, have said “no” to traditional pay-TV services. As a bonus, this report also offers forecasts for pay-TV and home broadband subscriptions, as well as the growth of Pay-TV Refugees through 2017.

This new report is offered exclusively to TDG Members. For more information on becoming a member, visit or contact our Research Services Team now at 469-287-8050.

About The Diffusion Group
TDG provides actionable intelligence on the quantum shifts impacting consumer technology and media behaviors. Since 2004, our market research and advisory services have helped technology vendors, media companies, and service providers understand how consumers access, navigate, distribute, and consume broadband media—whenever and wherever they may be.

For more information about The Diffusion Group, visit our website at

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Wendy Stockard
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