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Are 'Cord Nevers' a Function of Age, Money, Household Size or Children?

TMCnet Feature

October 29, 2014

Are 'Cord Nevers' a Function of Age, Money, Household Size or Children?

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By Gary Kim
Contributing Editor

Millennials are significantly more likely than their older counterparts to not subscribe to cable or other pay TV services. In fact 18-34 year olds are 77 percent more likely than average to be a cord never” household and 67 percent more likely to be a “cord cutter” household.


That said, only about 6.5 percent of households have cut the cord, meaning they used to buy a linear video service but no longer do so. On the other hand, those statistics do not include respondents who never have purchased a linear video service.

But it might not be clear whether the causation or correlation is household size or parental status, even more than age.

Some 60 percent of single-person households and 52 percent of households without children are “cord never” households. So, single-person homes, and homes without children, are highly correlated with refusal to buy linear video service.

And, that arguably is the bigger problem for linear video providers. Though some customers desert, others simply have never had any reason to buy the product. The difference is substantial.

The former group might be behaving in a way that suggests “I like the product, but it costs too much,” while the latter group is behaving in a way that suggests “I don’t find your product compelling enough to consider buying.”

More-affordable linear packages might turn the former into buyers again. That is not likely to work for the latter group.

What is so far largely untested is whether an over the top linear programming service would be substantially more favorably received by cord never households. It isn’t hard to imagine why the question exists.

About 40 percent of U.S. households subscribe to a paid digital video subscription service,

with Netflix being the leader (32 percent), followed by Amazon Prime Instant Video (19 percent) and Hulu (News - Alert) Plus (9 percent).

Across all of these services, Millennials have significantly higher subscription penetration, with nearly half belonging to Netflix. That suggests a possibility that shifting former linear delivery services aimed at TVs to over the top services aimed at PCs, tablets and smartphones could represent a different, and more-attractive proposition for “cord nevers”.

Among Netflix subscribers, the preferred method of watching (44 percent) is through Internet-connected TV devices such as Apple TV and Google (News - Alert) Chromecast.

Computers (27 percent) and gaming consoles/Blu-Ray Players (21 percent) also have strong levels of preference among the Netflix subscriber base.

On the other hand, the issue of household size and presence of children in the home could still be a key issue.

Netflix subscription has a strong relationship with household size—the presence of children in the household likely a key factor. Among one person or two person households, Netflix penetration is less than 25 percent, but penetration jumps significantly to well over 40 percent among households of three and greater.




Edited by Maurice Nagle


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