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The Latest on the TV Ecosystem

17 October 2013 | Blog

A few new studies have come in to once again calm the perpetual handwringing over cord-cutting. It’s true that Altman Vilandrie & Co. found that “cord-shaving” is up to 26% of consumers who are reducing services (“Cord-Shaving  & Mobile Viewing Rise, Report Says”). And 80% younger than 35 watch at least some TV shows or movies online. But the same study found that fewer than 5% replaced their TV subscription with regularly watching online video.

Better yet, a Pricewaterhouse Cooper survey found that 70% of those surveyed have cable subscriptions and 26% get satellite. Even more significant (and surprising), “younger people aged 18 to 24 had the highest level of cable subscriptions, at 77%, followed by the 25 to 34 age group at 73%” (“Survey: Younger Groups Still Heavy TV Consumers”). And since J.D. Power report a 70% score for overall customer satisfaction for distributors (“TV Still Scores in Consumer Satisfaction”), it doesn’t seem likely that these numbers are going to change any time soon.

So what does the rise of companies like Netflix, with their shiny new Emmy, really mean? For the moment, consumers aren’t watching less TV because of OTT and second screens; they’re just watching content from other services in addition to their regular TV diet. America, even its younger citizens, still loves its television.

They’re not the only ones. As a result, advertisers continue to love TV as well. Spending on TV ads increased by 6.4% in the second quarter of 2013. It’s not just that audiences still flock to television, either. Nielsen recently reported that “trust in television ads increased to 62% from 56% in 2013”.

Without an election or Olympics like 2012, TV advertising may not be quite as thrilling as some previous years. But looking at the long-term health of the ecosystem reveals a lot of consumers who are still excited about TV and more open to TV advertising than ever.