Kym Frank, Geopath President, reminded by the recent Netflix/Regency rumors, addresses the relevance to the overwhelming and growing withdrawal from monthly cable or satellite services. Commonly called Cord Cutting, Ms. Frank discusses the cord cutting phenomenon and the prospect created for OOH.
CORD CUTTING TRENDS – AN OPPORTUNITY FOR OOH
by Kym Frank
President, Geopath
email: kym@geopath.org
phone: 212-972-8075
New York City: Chances are you know someone who has already canceled their subscription to
cable or satellite television – a “Cord Cutter.” Or maybe someone who has
drastically cut back on their subscription – a “Cord Shaver.” Or maybe you know
someone who simply never subscribed to cable or satellite television to begin
with – a “Cord Never.” Or maybe you have already done one of these yourself.
The popularity of subscription services like Netflix and Amazon Prime, the rise of
smart TVs, and the ability to stream just about everything online – combined with
increasing costs for cable and satellite created a bit of a perfect storm. As
monthly cable/satellite subscription fees have increased over the years, a growing
number of consumers are questioning the value proposition.
The statistical evidence is overwhelming.
According to eMarketer, in 2017, 22% of US households either cut the cord or
reported to have never subscribed to pay TV. That number is projected to
exceed 30% by 2021.
Breaking it down by demographics, the coveted 25-34 age group has seen
the greatest movement away from traditional pay TV with one in three cutting
the cord.
87% report that rising costs are the primary drivers for divorcing the cable or
satellite company, but, according to Simmons, it’s families with household
income more than $100,000 among whom cord cutting is most prevalent,
suggesting the decision may be just as much about value as it is about
dollars.![]()
The emergence of commercial-free, subscription-based over-the-top services like
Netflix, Amazon and Hulu has contributed significantly to the cord cutting trend.
Those who have migrated are not only saying goodbye to their monthly cable bill,
they seem to be enjoying the content experience, as evidenced by the fact that
cord-cutters are spending 11 more hours watching Netflix every month than
those who subscribe to cable or satellite – yet another testament to value for dollars.
cord-cutters are spending 11 more hours watching Netflix every month than
those who subscribe to cable or satellite – yet another testament to value for dollars.
The implications for brand advertisers and their budgets are inescapable. The
Cord Cutters, Shavers, and Nevers just happen to be in one of the most sought-
after consumer groups, young and high-income.
This is an excellent opportunity for the Out of Home advertising industry (OOH).
According to Simmons, Adults aged 25-34 who have a household income over
$100,000 are 14% more likely to say that they’ve noticed an OOH ad in the last
30 days than the total population.
Supplementing a TV buy with OOH advertising is an excellent way to reach that
core group of high-income millennials who may be missing television advertising.
Additionally, it’s an excellent way for subscription-based video services to reach
the Cord Cutters, Shavers, and Nevers with their newly released original series
for the next big binge.
Judging from the sizeable amount of OOH being leveraged by services like
Amazon and Hulu, and the recent rumors about Netflix’s interest in Regency
Outdoor – they have already figured this out.
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this is not to be unexpected. first the newspaper industry, now traditional tv consumption. It COULD BE an opportunity for OOH, but we need to learn the lesson that is being played out here, and that is this:
The Millennial gen is demonstrating a far lower tolerance for poor-value enterprises than any generation before them.
When was the last time you were either entertained or impressed with the content of your local daily newspaper? as a result, subscriptions have been bleeding out. And for all it’s “variety” of programming, the big networks and the second-tier cable channels are at a loss for quality material. for every one good show, there are dozens that would have never made the cut 20 years ago. And hence, viewership has spoken and evolved, leaving traditional tv in a very precarious position.
We would be wise in the Out of Home industry to recognize today’s trend of valuing quality over quantity and make sure we are delivering quality designs IN ADDITION TO a quality schedule of reach and frequency.
johnny billboards- John Schelich, Tremendous insights and comments.
“Valuing quality over quantity,” advice not offered or followed often enough.
Thank you for your succinct points.