Yankee Group Says 1 in 8 Consumers Will Ax Their Coax This Year

New report finds consumers reducing or eliminating pay TV services in favor of Internet options

Boston, MA Apr 27, 2010 - The first cord-cutters were those who cut their traditional phone cords in favor of mobile phone services. Now Yankee Group uncovers a new category: the coax-cutter. These consumers cut off their pay TV services and use their PCs, gaming consoles and other connected devices to access video programming instead.  One in 8 consumers are set to join their ranks in the next 12 months.

In the new report "Consumers Consider Axing the Coax," Yankee Group finds the number of coax-cutters will grow due to three main factors: a new wave of connected TVs, ever-escalating pay TV prices and the advent of connected consumer devices that can act like set-top boxes, including Sony Playstation 3, Nintendo Wii and Microsoft Xbox 360 gaming consoles.

"At the most basic level, the decision to cut off pay TV services is an economic one," says Vince Vittore, principal analyst and co-author of the report. "As programmers continue to demand ever higher fees, which inevitably get passed on to consumers, we believe more consumers will be forced to consider coax-cutting."

Other findings include:

  • Pay TV market is flat-lining. Subscribers in Western Europe will increase just 3.9 percent from 2010 to 2013; U.S. subscribers are on a similar path, growing 6.9 percent in the same time frame.
  • Age and connected device usage play a role. Consumers who do cut off pay TV services will most likely be aged 18-34 and heavy mobile users or gamers.
  • Consumers will turn to other devices to skirt pay TV services. Fifty-six percent of households have at least one HDTV and 43 percent have at least one gaming console.

About Yankee Group
Yankee Group is the preeminent research and advisory firm equipping enterprises to profit in a mobile world. The core of our content is proprietary research and analytics on the attitudes, behaviors and usage patterns of mobile users. Based on this research, we provide a range of actionable data, insights and advices to marketing, strategy and product executives driving the mobility revolution in leading companies worldwide.