More Americans are "cutting the cord" but many also are keeping their cable

In spite of the availability of many digital streaming services such as Hulu and Netflix, 85 percent of U.S. households have traditional cable TV. Yet, market analyst TDG Research predicts that by 2030 up to 40 percent of Americans will have cut the cord.

TDG Research or Diffusion Group was founded in 2004 and focuses on predicting the future of the "connected consumer". Another example of their research can be found here.

The recession and the rise of streaming services

TDG predicted a decline in subscriptions to traditional cable TV in 2010 after the recession. Many Americans were looking to cut expenses. At the same time, digital streaming services such as Hulu and Netflix offered cheap alternatives.

The TDG predictions proved correct with the number of U.S. households paying for cable dropping every year since 2012. TDG predicts if the trend continues over the next 13 years the number of U.S. households having cable will drop to 60 percent.

Is the future of TV as an app?

Joel Espellen, Senior Analyst at TDG notes: "TDG said early on that the future of TV was an app. Unfortunately, most incumbent multi-channel video providers weren't taking notes. The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system."

While this may be true it is only in the very long run. After 13 years, the number of U.S. households having cable will still be at 60 percent if TDG predictions are correct. TDG's own research shows that if all those who have both a streaming service and cable TV were forced to chose only one service the majority would actually choose cable. Many households will no doubt have both streaming service plus the cable TV.

The report argues that now the Internet is a must have while cable is often a luxury add-on for Americans. The report notes that the number of broadband households is now greater than those that have pay-TV. However many may be adding the Internet while keeping their pay TV.

The generational divide

Cost is a major factor in cutting the cord and changing to streaming services. Two thirds of those who cut the cord or never had cable TV in the first place said that the cost was the main reason they do not use traditional cable TV.

However, there is a large generational gap between younger adults and other age groups especially those over 65.

61 percent of adults 18-29 said online streaming services were the primary way they watched TV. This was the only group in which a majority watched TV through streaming media. In every other age group a majority watched via cable TV or an antenna according to a recent Pew Research poll. Cable's significance increases within older age groups.

Overall, 59 percent of U.S. adults say cable connections are their primary means of watching TV. Only 28 percent cite streaming services while 9 percent say they use digital antennas.

My personal experience

I decided to cut the cord some time ago. I am in a minority of just five percent of those over 65 who use streaming media as my source for watching TV.

One disadvantage of streaming devices is that there are sometimes pauses to reload and it may take time to load. Interruptions may be quite common especially when downloading live broadcasts. In this respect, cable TV is quite superior. For those who have the money or are just happy with cable they may see no reason to cut the cord.

Previously published in Digital Journal