'Digital Cord Nevers' Overshadow Cord Cutters as Cable TV Threat, Forrester Says
Within 10 years, half of all TV watchers under the age of 32 will be "cord nevers," who have never paid for traditional cable service, said a Forrester report released Tuesday. The problem of dealing with such cord nevers eclipses…
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
the business challenges for cord cutters, Forrester said in the study. While paying customers for cable still are about 75 percent of the population, and the number of cord cutters is growing slowly -- today they're about 6 percent and are unlikely ever to top 15 percent -- cord nevers now are 18 percent of the population, the research firm said. And particularly worrisome are the ages 18-31 "digital cord nevers" -- who have "grown up believing they can have all of the TV they want without paying a traditional TV distributor for it," Forrester said. That group watches nearly eight hours of streaming video a week, particularly on laptops or desktops and smartphones, and often through such services as Netflix or YouTube, the company said. They're far less likely, though, to watch Hulu or Amazon Instant Video, meaning "ample opportunities for over-the-top (OTT) service providers to appeal to them with services that complement Netflix," Forrester said. Such digital cord nevers are "a permanent change that will only accelerate," meaning marketers need to focus more efforts into advertising during marquee events and into mobile video advertising, and take part in linear TV experiments targeting such cord nevers, like Sling TV or CBS All Access. Meanwhile, for programmers such trends indicate content will continue to be the gold standard, Forrester said: "It may not make as much money per viewer as it wants, or as it used to, but it still has the power to control most of the money that it and others make by windowing premium content and reselling rights to some players while denying rights to others." Also, programmer direct relationships to viewers will play a bigger role as some programmers will bypass Amazon or Netflix and start their own OTT services or create apps with the aim of deeper engagement with audiences, Forrester said. Programmers are likely to begin insisting on better data from online distributors beyond just aggregate program viewing numbers, so that by 2020 "no data, no deal" terms will likely be the norm, Forrester said.