The Great Cord-Cutting Debate: Is It Really The Wave Of The Future?

Illustrated By Louisa Cannell.
Hannah Jane DeCiutiis and her husband took the plunge in June.

It felt like money was disappearing into this box they didn’t really use, she says, so she broke up with her cable company. No more DVR. No more weekend marathons of America’s Next Top Model. No more disappearing into the TV Guide rabbit hole.

"We didn't really need it. I hated the commercials and the mindless hours I wasted flipping channels," DeCiutiis told me over the phone. "We would rather have the money for other things, and I would rather be mindful and deliberate about what I'm watching."

Like many millennials, DeCiutiis is a "cord cutter," a.k.a. someone who chose to cut off their attachment to a traditional cable provider. But being a cord cutter in 2016 means something very different than it did in 2010 — or even 2014. Getting rid of cable no longer translates to losing access to the shows you love; platforms like Netflix, Amazon, and HBO Go, as well as products like Roku and Apple TV, among others services, deliver content to your smartphone, laptop, iPad, and TV set à la carte. Still, the question remains: Are millennials really going to forever change the way people watch television?

Since TV was introduced in the late 1940s and then made its way into homes across America over the next half-century, consumers have routinely reevaluated their cable relationships. But only in the last few years has it become trend-worthy enough to cause some concern: According to a survey conducted by Convergence Consulting Group, approximately 2.65 million U.S. citizens canceled their cable TV subscriptions between 2008 and 2011 to opt for low-cost internet video streaming subscription services or other free video platforms.

That pace has only gained speed in recent years: Nearly 400,000 people said goodbye to their cable in 2015, and that number is expected to have increased across 2016. According to data from eMarketer, by the end of last year, nearly 4.9 million Americans had cut their cable cord. That’s no small number. Predictably, millennials are cutting their cable at a much faster rate than the rest of America. Among people between the ages of 21 and 34, 38% of respondents said they plan to cancel their cable or satellite subscription and replace it with online video services, a Nielsen survey released in March found.

"We never watched it and our rent had gone up, so wanted to cut costs wherever we could," Dawn Rzeznikiewicz, who lives in New York with her two roommates, told me. "One roommate did want to keep it, but she got outvoted." The only thing Rzeznikiewicz — and many other millennial cord cutters I spoke with — could imagine needing cable for was sports and live TV events. Between Apple TV's apps, Dish Network's Sling TV, live social media broadcasts, and digital antennas, keeping the cord intact becomes ever-more unnecessary.

Is cord-cutting really more cost effective than a comprehensive cable plan if you have to subscribe to myriad services in order to watch the content you want?

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In the context of the 100 million Americans still paying for cable, it’s not exactly doomsday for cable companies. But the larger concern for major cable providers isn’t that they are losing all of their clientele (they’re not) but that millennials, and the generations that come after them, are going to shift the way television is consumed from here on out.

"Think of it like a funnel," Bruce Leichtman, the president of the Leichtman Research Group (LRG) explained. Leaking from the bottom of the funnel are the cord cutters — something like 2-3% of the total users. “The concern isn’t about the cord cutters,” Leichtman says. "It’s that people are not being added to the top of the funnel at the same rate that they used to. That is a function of consumers having more choices."

While you can splice the data a lot of different ways, one thing is clear: Fewer millennials are paying for cable than their parents and grandparents did. In my interviews, young people confessed to leaving because cable was too expensive, or they hated commercials, or they never watched live television, anyway. But that doesn't mean this demographic group is scaling back on the amount of TV they watch: They're tuning in as often as ever, just doing it by more diverse means than past generations; they also aren't necessarily spending less money on TV entertainment. They're merely spreading out their bills in a different way.

"What we’re really seeing is fragmentation," Leichtman says. "It’s across all industries, but it’s particularly obvious in television where there are more and more vehicles of consumption." One interpretation of the trend: Instead of paying for one giant bundle of every channel, millennial television consumers might choose to pay for several different services at once.

This is true at least for my cord-cutter source Hannah Jane DeCiutiis. She and her husband pay for Netflix ($9.99 per month), HBO Now ($15 per month), and Amazon Prime ($10.99 per month). That means they can still watch the brand-new episodes of shows like Westworld or Game of Thrones live without paying for cable. Theirs is a fairly common setup. According to the GFK study, more than a third of all households subscribe to a TV streaming service: 31% to Netflix, 16% to Amazon Prime Video, and 7% to Hulu, with some overlap.

But unlike DeCiutiis and her husband, some of those households also pay for cable, which brings up a big question: Is cord-cutting really more cost effective than a comprehensive cable plan if you have to subscribe to myriad services in order to watch the content you want?

Several sources I spoke with said they weren’t really saving very much money at all by cord-cutting: After paying for Amazon, Hulu, Netflix, and HBO Now, a user would still be paying about $40.00 a month. Granted, that’s cheaper than the close to $100.00 one might pay for cable. But to get all of the channels available on cable, the comparative price points would be about the same — and that's without factoring in the (albeit onetime) cost of a digital media player, such as a streaming media player like Roku or Apple TV.

"Cord-cutting is not meant to be a one-for-one replacement for cable," Luke Bouma of cordcuttersnews.com told me. “If you signed up for Sling, HBO Now, Netflix, and Hulu, you’ve got a lot of redundancy there, and you’ll probably end up paying more than you would just for cable."

Another reason cable subscriptions continue to retain a majority market share: The major U.S. cable providers also happen to own most of the broadband internet. So while you may be able to cut the cable cord, you're still tethered to WiFi if you want to stream, and that means maintaining a connection with Big Cable. Since cable TV and internet are often bundle, for some people it's just easier to stick with their traditional TV package.

What's more: As the industry becomes more and more fragmented, the cost to continue watching all the shows on all the services cord cutters pay for right now could rise, causing them to pay even more than they did before. In the future, consumers may return to cable or bundling packages yet again to save money.

But for now at least — in 2016 and beyond — cord-cutting is not only trendy, it’s a great way to tailor your entertainment interests directly to your personal tastes. “Older generations in my family like to have the news or certain shows running in the background when they're home, but we don’t really do that,” Hannah Jane DeCiutiis says. “I really don’t miss it at all.”

Ed. note: An earlier version of this story neglected to mention that Turner is a Refinery29 investor. We regret the omission.

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