More than a quarter of TV subscribers mulling cable-cutting, study says
27 per cent of respondents undecided or ready to drop traditional broadcast providers
Many cable or satellite TV customers are considering cancelling their subscriptions, according to a new survey by market research firm J.D. Power.
The 2017 survey of 9,308 Canadian TV customers found that 27 per cent are mulling cutting the TV cord. Of those, 19 per cent say they're on the fence, and eight per cent actually plan to do the deed within the next 12 months.
It's a warning sign.— Adrian Chung, J.D. Power
The findings don't suggest an exodus — at least not at this point, says Adrian Chung, director at J.D. Power in Toronto. That's because the on-the-fence customers have yet to make a decision and, for now, are still part of the whopping 11.2 million Canadians who subscribe to traditional TV.
But, according to the survey there could be trouble ahead for TV providers. That's because more people are signing up for streaming services — Netflix in particular — and find them more satisfying than cable or satellite.
"It's a warning sign," says Chung. "We're seeing from our vantage point a high satisfaction with these [streaming] services." He adds that traditionally, TV providers don't garner high satisfaction scores.
Netflix beats out TV
The study found that 53 per cent of TV customers had used a streaming service within the past year — up from 42 per cent in 2015.
When rating overall customer satisfaction on a 10-point scale, streaming services scored 7.58 and traditional TV, 7.04.
When it came to price satisfaction, streaming services scored even higher: 7.84 versus 5.97 for TV service.
A standard Netflix subscription costs about $10 a month. TV plans start at around $25 — minus equipment rental — and can run up to more than $100 a month.
"When it comes down to absolute dollars, people can obviously get behind, 'I'm just going to be spending $10 month,' versus something that may be 10 times that," says Chung.
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The survey also found that the quicker their internet speed, the happier customers were with their streaming service. With network speeds becoming even faster, it could further shift viewing preferences, says Chung.
"It's certainly going to be a key component in allowing those streaming services to succeed."
In an April report, Convergence Research Group Ltd. estimated 220,000 traditional TV subscribers cut the cord in 2016, compared to 190,000 in 2015.
'Stupid fireplace channel'
David Sheard in Ingersoll, Ont. says he's preparing to cut his cable and replace it with a TV antenna and Netflix. He hasn't tried the streaming service yet but says his son loves it and Sheard is looking forward to monthly fees of just $10.
The retired postal worker has been slowly weaning himself off cable. In February, he downsized his large TV plan, which was costing him around $75 a month. He was tired of paying for numerous channels he didn't watch.
"They've got the stupid fireplace channel, the sunset channel, the aquarium channel," says Sheard. "There were so many. I call them useless stations."
Sheard pared down to the $25 basic TV package which amounted to $35 a month after fees and taxes.
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But now he finds even that a waste of money because he can access many of the shows he watches for free online. Plus, he discovered his neighbour gets eight major Canadian channels for free — simply by using a cheap, indoor antenna.
"She just has it faced to the north-east and she picks up all these channels," says Sheard. "The quality of the picture is fantastic. I really couldn't believe it."
He's facing a hiccup at the moment: he wants to install an outdoor antenna but says the developer of his subdivision doesn't allow them. He hopes to resolve that soon and part with his cable by the fall.
"There's alternative and different choices out there for people to take now," says Sheard. "And it will only get better, I think."
As the alternatives grow, it could further ignite cable cutting. Bell's streaming service, Crave TV has been adding more popular shows to its lineup and the company recently launched Alt TV. It allows subscribers to watch Bell channels using an app on their wireless devices without requiring a cable box or even a television set.
The service is only available to customers who already subscribe to Bell's Fibe high-speed home internet service, and will cost those customers an additional $14.95 per month.