Another day, another “study” on cord cutting that gets repeated as fact by the tech press. Hat tip to TV Answerman Phillip Swann for bringing this to our attention.
This one, which claims that a whopping 60% of Americans have already cut the cord, with a further 29% “close to canceling their cable subscription and going all-in on streaming” (that’s 89% altogether) is particularly egregious to the point where even #GoodLuckBundler Rich Greenfield was moved to call it “#worthless” on Twitter.
Absurd survey — #worthless beyond the underlying theme
— Rich Greenfield (@RichBTIG) January 30, 2019
The report, from a Chicago-based management consulting company called Waterstone, and picked up by numerous publications: BGR, The Daily Mail, B&C, RapidTV News, PhillyVoice, Multichannel News plus TV Technology and Marketingland (which both did actual interviews with the SEO firm behind the study without seemingly realizing/acknowledging that they were an SEO marketing firm working for a client rather than an actual research company!) is allegedly based on a survey of 5,000 people nationwide and even comes with a lovely map infographic.
But here’s the thing: how could a management company the size of Waterstone and all these well-respected trade publications not know that (a) if cord cutting was truly at 60% then Comcast, Charter, Verizon, Cox, AT&T et al would be filing for bankruptcy, (b) that pay-TV providers are public companies and, as such, reveal their subscriber numbers quarterly (e.g., as in the survey results are easily checkable), and (c) if pay TV providers had indeed lost 60% of their subscribers, it would be front page news not magically revealed in a consulting firm’s survey.
UPDATE: And here’s the answer: the report was not written by Waterstone, but rather by a third-party SEO marketing firm called Digital Third Coast. The author of the report (he’s listed as a “creative director” not a “researcher”) has a bio on DTC’s website that notes We study what interests people, what they share, then we pair that data with some wicked instinct and get to work. When we’re successful (often), our clients earn links from big, important websites. Those links then make Google look at our clients like they’re Ryan Gosling in a v-neck holding puppies at a charity event.
So there you have it.
What’s frightening is that this is how #FakeNews spreads. A story with a small kernel of truth. Confirmation bias on the part of certain editors and boom, a story with no basis in reality is born. (Wayne Friedman at MediaPost was the only one to call them out.)
UPDATE #2: It seems both Multichannel News and BroadcastingCable have pulled the story. Click on the links above and you get a blank page. Kudos to them for wising up.
While cord cutting is happening, even the most pessimistic estimates have about 10% of viewers exiting stage right. The estimates we tend to give credence to have that number at closer to 5%, or around 1% a year for the past five years. (The difference stems from how “cord nevers” and “new households” are counted and how many of them there are and the overlap between the two categories.)
2019 and 2020, as we’ve written, may be watershed years for cord cutting though, as the Flixpocalypse happens and as many as five new services join the existing Big Three (Netflix, Amazon and Hulu), thus giving consumers way more TV than they may ever have time to watch.
Now our estimate is that yearly defections may go up to 7% (from 1%) because people are lazy and because local news and sports.
That number may be mitigated however if the vMVPDs offer super skinny bundles of local broadcast networks and/or if Amazon winds up picking up a number of Fox’s RSNs. (Those are two big “ifs.”)