1 in 10 Millennials, Gen Xers and Baby Boomers don’t have pay TV

It seems that Millennials are not alone in their pursuit of cost savings and curated content as new research from Mintel reveals that the same percentage of Millennial, Generation X and Baby Boomer consumers* (10 percent respectively) say their households do not subscribe to a pay TV service. And while some Americans are ‘cord-cutters,’ many are ‘cord-nevers’ as only one third (33 percent) of those without pay TV service say they have ever had a subscription, including just 29 percent of non-subscribers aged 18-44.

55% of those with a household income under $50,000 agree that they can’t afford pay TV service.
Rather than age, it appears household income is the driving force impacting the pay TV industry. The percentage of Americans who say their household does not subscribe to a pay TV service increases as household income declines. Indeed, while just six percent of those with a household income of $50,000 or more per year say they do not subscribe to a pay TV service, this number triples to 18 percent of those making less than $50,000. Indeed, it seems cost is the biggest barrier to subscription as more than half (55 percent) of those with a household income under $50,000 agree that they can’t afford pay TV service.

“Despite media attention suggesting that the pay TV industry is at risk because younger users are cutting the cord, our research indicates that the operating factor in the choice to be a non-subscriber is not young users opting for over-the-top (OTT) services instead of cable, but lower-income households unable to afford pay TV,” said Billy Hulkower, Senior Technology Analyst at Mintel. “The number of consumers cutting the cord is actually quite small when compared to ‘cord-nevers’ who create a much larger problem for the industry, especially as these non-users are unlikely to know what they’ve been missing.”

While widely popular, it appears that video streaming services are not the reason consumers are cutting the cord as Mintel research shows that households that have cable are more likely to subscribe to multiple OTT content services. In fact, subscription to a pay TV service is nearly universal among those who use six or more sources of online video content (98 percent), declining to just 85 percent of pay TV subscribers who use just one source of online video content. What’s more, three quarters of those who use TV Everywhere (TVE) services to watch pay TV-sourced content whenever and wherever are also more likely to use six or more sources of online video content (76 percent).

Among those who subscribe to pay TV services, more than half (55 percent) agree that they are happy with the programming available to them. Meanwhile, one quarter (23 percent) say they are bored with regular television.

And it seems there is no love lost for pay TV non-subscribers as just four percent say they intend to add pay TV service in the next year. Access to free television service may be the culprit given that over half (56 percent) of non-subscribers say they watch TV for free using an antenna.

“Contrary to the belief that consumers are cutting the cord in favor of streaming services, our research shows that those who use a variety of online video sources are more likely to keep pay TV as part of their video portfolio mix. Instead, the basic driver for whether new services will be adopted is existing affinity for video content. Those who prioritize the benefits of having access to more content will find the time and means to adopt these services. Overall, the key to a successful growth strategy is extended free trials for low-cost skinny bundles. However, even this strategy is likely to bring in only limited growth as few intend to add pay TV service in the near future, due in part to accessibility of free TV,” concluded Hulkower.

*Mintel defines Millennials as ages 23-40, Generation X as ages 41-52, and Baby Boomers as ages 53-71 in 2017.

Press copies of Mintel’s Content Consumption: TV and Movies US 2017 report and interviews with Billy Hulkower, Senior Technology Analyst, are available on request from the press office.