June 13, 2019
Sixteen million U.S. households have officially cut the cord to their cable television service, according to a new 2019 poll by Nielson. This represents a staggering 48% increase over an eight-year period.
Developers have long deployed traditional cable lines to their residential properties, however, the cord-cutting trend has made some question the best approach when wiring new properties.
“Don’t ditch the traditional television quite yet,” said Michelle Norris, director of business development at Bel Air Internet, a Los Angeles-based internet and communications provider. “Obviously, there is a huge trend toward cord-cutting that can’t be ignored. However, when you look deeper at the demographics, the story begins to change.”
Bel Air Internet delivers both high-speed internet and DirecTV services to hundreds of residential properties across Southern California and Las Vegas, and Norris said that, from the company’s perspective, patterns tend to break down by generation.
She said that millennials and their successors, Generation Z, the upcoming newest class of renters, consider cord-cutting the norm. They are unwilling to pay for traditional cable, which they see as a premium choice, preferring to purchase higher bandwidth internet packages and subscribing to one or more subscription video on demand (SVOD) platforms, such as Netflix. These groups are also more likely to focus on over-the-top (OTT) subscriptions, such as SlingTV. Norris explained that, these generations are used to instant gratification, and they prefer the cost-effective, on-demand nature of these services.
However, cord-cutting appears to be more difficult for adults in their late 30s and early 40s. “The Gen-X renters we’ve seen appear to want it all,” Norris said. While these individuals subscribe to least one SVOD platform, such as Hulu or Amazon, they also want traditional television as well, toggling between all their services. Gen X cohorts have more disposable income than most millennials, which could be one reason for the difference. This does, however, speak to different viewing patterns and relationships with traditional television for a generation that did not experience the internet revolution until well into their 20s.
Finally, the baby boomers, which are now “America’s fastest growing group of renters,” are the least likely to cut the cord. According to Norris, most of these hard-core traditionalists wouldn’t dream of cutting the cord, and a robust traditional television solution is a must-have for them. “The baby boomers want access to local television, sports programming, premium entertainment and news. They often choose a smaller Internet package, only to supplement with a more extensive television one,” she said.
In response, more developers are taking a dual-pronged approach, in which they continue investing in future-forward bandwidth solutions, but not at the expense of traditional television. “With bandwidth needs growing exponentially each year, it’s essential for developers to have an internet solution that will continue to grow with them as renters needs continue to evolve,” Norris said. “However, solutions that are too forward-leaning, including offering few or no classic television options, will turn off a huge, growing swathe of renters, the boomers.”
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