DALLAS—An increasing number of U.S. internet households are characterizing themselves as “cord cutters” according to Parks Associates' latest research from its Video Services Consumer Insights Dashboard.
According to the report, 56 million (46%) of U.S. internet households are “cord cutters,’ while 12 % are “cord nevers,” who have never subscribed to any sort of traditional pay TV.
The Dashboard research service tracks adoption trends and shifts in the video services market, including households who are disconnecting in favor of free-to-air broadcasts or online video services.
Service providers are adapting by offering competitive pricing, bundling options, and hybrid monetization strategies. The rise of ad-supported video-on-demand (AVOD) and free ad-supported streaming TV (FAST) services shows the demand for lower-cost alternatives, and subscription-based platforms continue to experiment with tiered pricing and content exclusivity to retain customers.
"Cord Nevers represent a unique opportunity for streaming providers," said Jennifer Kent, Vice President, Research, Parks Associates. "By definition, this segment of the market has not paid for traditional pay TV, but streaming services have found a way to monetize a segment that has not previously valued subscription video or has grown up in a streaming-first market, with different conceptions of what subscription video should be."
For leading streaming services, many consumers prefer the basic tier with ads over the more expensive premium tier with no ads; as of Q3 2024, 59% of subscriptions across the eight leading SVOD services are basic tier with ads subscriptions:
- MAX (formerly HBO)
- Netflix
- Disney+
- Discovery+
- Paramount+
- Prime Video
- Hulu
- Peacock
To achieve profitability and strike a balance for consumers, many of the most popular services now operate under a hybrid model, offering both ad-free and ad-supported plans to viewers. Ad-based tiers are cheaper for consumers and more profitable for businesses, making them a win-win for both parties, according to the researcher.
"Consumers are worn down from continued spending increases in streaming, while years of high inflation are driving consumers to pare down accordingly," Kent said. "This only intensifies the competition among streaming vendors and will fuel more growth of subscription tiers with ads and free ad-based services."
