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Fact-Checking The 'Cord Cutting' Phenomenon.

By Sarah Liddle

We all see the headlines. "Cord cutting" is accelerating. Viewers may soon do away with TV as we know it. As Netflix, Amazon Prime and other streaming services gain traction, it may seem that traditional pay TV services — cable and satellite — are heading for the exits.

But, headlines can be misleading — in abigway.

Recent GfK MRI research tells a much different story, providing a more nuanced -- and realistic -- view of today's complex TV marketplace.

MRI's Cord Evolution studies show that seven in 10 U.S. consumers who subscribe to pay-TV have no plans to drop it. Even among the prized 18-to-34 age group, 56% intend to keep their cords -- not to mention 79% of those 50 and over.

Among Hispanics, the proportions are largely the same. Some 65% who have a cord plan to keep it, with a slightly higher number for the 18-to-34 segment (60%) and a slightly lower one among adults aged 50+ (69%). The most recent Cord Evolution study included surveys fielded in Spanish, to collect this all-important data accurately.

WHY LATINOS ARE LURED TO MVPDs

The top five reasons that Hispanic pay-TV subscribers plan to stick with their cords are revealing -- and largely driven by convenience and comfort. The top motivator is that Hispanic viewers are simply "used to" their pay-TV services.

Other leading reasons for keeping TV cords include "convenient to have everything in one place" (#2), "need it to watch the shows I want to watch" (#3), "would miss it" (#4), and "hassle to cancel" (#5).

Of course, Hispanics -- like U.S. consumers generally -- are often adding other TV services to their pay-TV connections. Some 50% of Latino respondents subscribe to a streaming service in addition to traditional pay-TV -- 51% among the 18-to-34 age group. Even the 35- to 49-year-old Hispanic is just slightly above average (55%) when it comes to "stacking" a streaming subscription on top of pay-TV.

For many Hispanics, like other Americans, TV is a lean-back medium. It's all about ease and simplicity. Sure, unlimited viewing options can be great. But, at the end of a day filled with so many tasks and choices, people often want a seamless, crash-on-the-couch experience. They associate this with cable and satellite TV — especially if they are older viewers who still see Netflix or Apple TV as brave new territory. MRI attitudinal data show that, while comfortable with mobile viewing of video content, Hispanics are more likely than most Americans to rely on apps from TV networks and service providers -- traditional sources -- for things to watch.

Yes, streaming is a major force in the new world of "TVideo," and every TV stakeholder needs to take that into account. But, traditional signal providers still account for the lion's share of sitting-on-the-couch hours. This means they remain gatekeepers of huge importance.

Keeping this view in perspective is essential to making clear-headed decisions about the TV marketplace.

Sarah Liddle is the Vice President of Sales at GfK MRI. She can be reached at sarah.liddle@gfk.com.

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Publication:Radio and Television Business Report (RBR+TVBR)
Date:Dec 17, 2018
Words:522
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