April 5, 2012 at 3:36 PM ET
We hear about it from others, and some of us have done it ourselves: gotten rid of pay TV to save money and watch what we want over-the air, online and using streaming services. In 2011, a new study says, just over 1 million American subscribers did just that, and by the end of this year, "cord cutters" will total 3.58 million, or 3.6 percent of TV subscribers in the U.S.
The study is from the Convergence Consulting Group Ltd., which annually looks at the "The Battle for the North American Couch Potato."
The firm uses its "TV Cord Cutting Model" that figures in economic conditions and annual subscriber additions, among other details.
"We estimate 112,000 TV subscribers were added in 2011, down from 272,000 in 2010, and forecast 185,000 TV (subscriber) additions for 2012," Convergence Consulting said.
Those who are cutting the cord are relying on free, over-the-air broadcasts for high-definition TV, as well as watching programs broadcast online by networks (both free and paid, such as Hulu and Hulu Plus), and using streaming services like Netflix.
But, online "free" TV is becoming less appealing: "Broadcast and cable networks continue to make online full- episode TV ‘less free’ by upping ad minutes, and windowing or reducing shows available for free by authenticating behind cable, satellite, telco TV access players’ walled gardens," the firm said, adding:
The audience for free full-episode (not Hulu Plus, iTunes, Netflix, etc or walled garden requiring a paid subscription) has started to plateau. Based on the full-episode TV shows broadcasters & cable networks made available online for free in 2011, we estimate that on average 19 percent of the weekly viewing audience watched on average between one to two episodes at a broadcaster or cable network or one of their distribution partner’s websites (CBS Audience Network & Hulu/partners), up from 18 percent in 2010, 15 percent in 2009, and we forecast 19 percent for 2012.
The single-digit percentage of those cutting the cord may not seem like a lot right now, and cable companies aren't yet quaking in their boots. Said Brahm Eiley, co-founder Convergence Consulting, in an interview with PaidContent, "The revolution is not coming, at least not for a very long time."