Nearly Two-Thirds of US Households Could Become Cord-Cutters

Good news for NBCU’s Peacock: Trade Desk report finds that younger consumers actually prefer ad-supported streaming services

Cord-cutting could be accelerating with stay-at-home directives brought on by the coronavirus having an adverse affect on the legacy cable bundle, according to a new survey from The Trade Desk.

The company found that 64% of Americans have either cut the cord, are planning to drop their pay-TV subscriptions, or never subscribed in the first place. Of those households that do still have cable TV subscriptions, 11% plan to cut the cord by the end of the year. Trade Desk surveyed 2,600 Americans for the study.

Cord-cutting could only further accelerate, The Trade Desk argues, as long as sports remains on hold. The survey found that 60% of Americans keep their subscriptions to watch live sports. The lack of many TV options outside of news and late night programming is giving consumers the chance to check out new streaming services that have launched within the past few months.

“With only a quarter of young professionals having any long-term interest in traditional cable TV,  in a few years we won’t be talking about linear or cable TV at all. It will all be online and  streaming,” said Brian Stempeck, Chief Strategy Officer, The Trade Desk. “For broadcasters and  advertisers, it’s now all about how quickly they can pivot to where the eyeballs are moving and  many of them are already investing heavily in order to succeed in a world of connected TV.”

The survey also found something that should make NBCUniversal optimistic about its streaming service Peacock, which rolled out to Comcast TV subscribers last week: The majority of Americans actually prefer a free service that is buttressed by ads over paying for an ad-free experience. Overall, 35 % of adults 18-34 would rather watch a free streaming service with advertising or some ads for a cheaper subscription, versus 31% who would prefer to pay for a  subscription with no ads. The percentage of those who would prefer an ad-supported option dropped as the age group got older.

“As more consumers shift to connected TV, broadcasters and advertisers can more easily  address issues of ad frequency and ad volume, in ways that are not possible in a traditional TV  environment,” said Stempeck. “With CTV, the advertiser can work with an ad tech partner to  understand who was exposed to an ad, even across devices, and can reduce ad frequency as a  result. In addition, with CTV, advertisers can apply more data science to their advertising, making  it more relevant to the consumer without compromising their privacy. This increases the value of  the ads, which means lower ad volume, over time.”