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

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

November 27, 2012 (Frisco, TX) – 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 share obvious dispositions (they both subscribe 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 Pay-TV Refugees in both segments 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 of 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.