Report links OTT on television with increase in cord cutting

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A report by consumer data company Experian shows a direct link between the availability of over-the-top content such as Netflix (NASDAQ: NFLX) and an increase in consumers cutting the cable cord.

In data compiled from interviews with 24,219 U.S. adults, the report showed that in 2013 18.1 percent of households with a Netflix or Hulu account fell into the cord-cutter category. In 2010 that number was 12.7 percent. At the same time, the total percentage of cord-cutting U.S. households across all subscriptions climbed to 6.5 percent from 4.5 percent in 2010.

"While the term cord-cutter implies that a household had a cable or satellite TV subscription that was cancelled, young adults starting out on their own for the first time may never pay for TV service," the report stated.

The numbers seem to back that up as households with anyone in the 18-34 age range comprise 12.4 percent of cord cutter households. That number, too, is up from 7.9 percent in 2010.

Perhaps most telling in the statistics--and the area that would seem most heartening to pay TV subscribers--is the finding that viewing content on devices isn't driving cord cutting. When that content is available on TV, however, it's another matter.

"Despite the fact that a growing number of Americans are watching video on portable personal devices, that doesn't seem to be enough to overwhelmingly convince Americans to cut the cord," the report states. "Rather, it's the ability to stream or download video directly to the television--the modern caveman's campfire--that seems to be the tipping point."

The conclusion: "As devices like Roku, Apple TV and Google Chromecast become more common and as televisions themselves are increasingly connected to the Internet directly, we should expect to see the number of cord-cutters grow."

Television itself, therefore, seems exempt from the trend. Only the way the television is delivered to the consumer comes into play.

"What we're really witnessing is the transition of the definition of "television" from referring to a type of content to a device commonly used to consume video," the report stated. "Television is likely to remain the primary device to consume video as a group for a long time to come, whether the source of video comes from a broadcast signal, a cable or satellite feed or streamed through the Internet."

For more:
- Experian has this report (.pdf)

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