After Axing Cable, Cord-Cutters Are Saving An Average of $115.34 Per Month

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After Axing Cable, Cord-Cutters Are Saving An Average of $115.34 Per Month

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Category: Personal Finance

mattMike Brown

January 25, 2018

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After Axing Cable, Cord-Cutters Are Saving An Average of $115.33 Per Month

2018 is here, and at this point, there is not a single industry that has not been impacted, for better or for worse, by technology.

It has changed the way we shop, transport, communicate, and consume our favorite forms of entertainment.

Taking in shows, movies, sporting events, and news through traditional cable is quickly dying. A 2017 report found that 25 percent of American households would no longer have a cable subscription by the end of the year. The same report also stated that 2015 witnessed a decline of 1.16 million TV ​subscribers, followed by another 2.05 million in 2016. It also estimated that by the end of 2017, another 2.11 million TV subscribers would have been lost.

As a personal finance comparison site, LendEDU wanted to put some numbers behind this growing trend of cutting the cord in favor of streaming services like Netflix and apps like ROKU.

To do this, we surveyed 500 cord-cutters who canceled their traditional cable services within the last two years and 500 consumers that are still using a cable subscription for their homes. ​

Full Results

1. (Only this question combines the results from both our survey of 500 cord-cutters and 500 cable subscribers) What is your average monthly expenditure for a traditional TV cable service?

The data from our surveys revealed that the average monthly expenditure for a traditional TV cable service is $116.93.

Note: The answers from our cord-cutter respondents refer to when they had a cable TV subscription.

Questions & Answers From Poll of 500 Cord-Cutters

1. Which of the following best describes why you cut the TV cable cord?

a. 58.60% of cord-cutters answered “my TV cable subscription was too expensive.”

b. 11.80% of cord-cutters answered “my TV cable subscription didn’t provide the content I wanted.”

c. 21.20% of cord-cutters answered “I used my TV cable subscription less because of online streaming services.”

d. 4.00% of cord-cutters answered “I resent the cable companies for their greed and wanted to take a stand.”

e. 4.40% of cord-cutters answered “other.”

2. Before you cut the TV cable cord, did you use online streaming services (ex. Netflix, Hulu, Amazon, HBO Go, etc.)?

a. 71.60% of cord-cutters answered “yes.”

b. 28.40% of cord-cutters answered “no.”

3. (Asked only to those who answered “A” to Q2) Before you cut the TV cable cord, how many online streaming subscriptions did you have?

The average cord-cutter held about three (2.77) online streaming subscriptions before cutting the TV cable cord.

4. (Asked only to those who answered “A” to Q2) Before you cut the TV cable cord, how much did you spend per month on online streaming services?

The average cord-cutter spent $33.74 per month on online streaming services before cutting the TV cable cord.

5. As of today, do you currently purchase online streaming services (ex. Netflix, Hulu, Amazon, HBO Go, etc.)?

a. 77.20% of cord-cutters currently purchase online streaming services.

b. 22.80% of cord-cutters currently do not purchase online streaming services.

6. (Asked only to those who answered “A” to Q5) As of today, how many online subscriptions do you have?

The average cord-cutter currently holds about three (2.86) online streaming subscriptions.

7. (Asked only to those who answered “A” to Q5) As of today, how much do you spend per month on online streaming services?

The average cord-cutter currently spends $35.33 per month on online streaming services.

8. Do you use online streaming subscriptions that are not yours/you do not pay for?

a. 34.40% of cord-cutters answered “yes.”

b. 65.60% of cord-cutters answered “no.”

9. (Asked only to those who answered “A” to Q8) In your estimation, how much money are you saving per month by not paying for online streaming subscriptions but watching them through another’s account information?

The average cord-cutter that is using online streaming subscriptions that he or she does not pay for is saving $51.38 per month by watching but not paying.

Questions & Answers From Poll of 500 Cable Subscribers

1. Do you currently purchase online streaming services (ex. Netflix, Hulu, Amazon, HBO Go, etc.)?

a. 79.80% of cable subscribers answered “yes.”

b. 20.20% of cable subscribers answered “no.”

2. (Asked only to those who answered “A” to Q1) How many online streaming subscriptions do you have?

The average cable subscriber currently holds about three (2.50) online streaming subscriptions.

3. (Asked only to those who answered “A” to Q1) How much do you spend per month on online streaming services?

The average cable subscriber currently spends $30.87 per month on online streaming services.

4. (Asked only to those who answered “A” to Q1) Do you use cable or your online streaming services more?

a. 52.13% of cable subscribers answered “cable.”

b. 47.87% of cable subscribers answered “streaming services.”

5. Would you consider cutting the cord from your TV cable subscription?

a. 56.00% of cable subscribers answered “yes.”

b. 44.00% of cable subscribers answered “no.”

6. Which of the following would make you most likely to cut the cord from your TV cable subscription?

a. 67.40% of cable subscribers answered “The price of cable TV subscriptions increases.”

b. 18.20% of cable subscribers answered “The overall quality of programming and content at online streaming services improves.”

c. 8.00% of cable subscribers answered “poor customer satisfaction with current cable TV programming and content.”

d. 6.40% of cable subscribers answered “other.”

7. Do you think you will be using cable in one year?

a. 69.00% of cable subscribers answered “yes.”

b. 31.00% of cable subscribers answered “no.”​

8. Do you think you will be using cable in three years?

a. 50.40% of cable subscribers answered “yes.”

b. 49.60% of cable subscribers answered “no.”​

9. Do you think you will be using cable in five years?

a. 44.00% of cable subscribers answered “yes.”

b. 56.00% of cable subscribers answered “no.”​

10. In your opinion, what is cable’s biggest attraction?

a. 42.60% of cable subscribers answered “The ability to channel surf.”

b. 35.20% of cable subscribers answered “not having to depend on my WiFi connection.”

c. 10.40% of cable subscribers answered “live news.”

d. 11.80% of cable subscribers answered “live sports.”

Observations & Analysis

Getting Rid of Cable is Saving Cord-Cutters An Average of $115.33 Per Month

The results from LendEDU’s Cost of Cable survey revealed that cord-cutters are saving a considerable sum of money after making the decision to snip their cable subscriptions: $115.33 per month to be exact.

We came to this average save number by taking the monthly average cable expenditure ($116.93) and adding to it the average amount spent by cord-cutters on online streaming services before they axed their TV cable subscriptions ($33.74). ​This monthly entertainment expenditure sum of $150.67 was than subtracted by the current average amount cord-cutters spend per month on online streaming services ($35.33).

The resulting sum of $115.33 can be recognized as the average amount of money cord-cutters are saving by nixing cable. Projected over a year, cord-cutters are saving $1,383.96 by cutting cable out of the entertainment equation; this is money that can be used to pay maybe up to three months of rent, pay off student loan debt, or even used to fund that dream vacation to Thailand.

 

 

Exchanging local evening news and re-runs of The Big Bang Theory for money that can be used for a variety of debts or impactful purchases sounds like a pretty good deal.

Using Online Streaming Subscriptions That Are Not Theirs, Cord-Cutters Saving $51.38 A Month

When we asked our respondent pool of 500 cord-cutters if they were using online streaming subscriptions that were not theirs or that they did not pay for, 34.40 percent stated their “guilt.”

A previous LendEDU poll of strictly millennials found that 59.00 percent of this generation were using Netflix subscriptions that did not belong to them.

The result of more than one-third of cord-cutters using online streaming subscriptions that they do not pay for: the same entertainment value, but $51.38 that is staying in their pockets each month.

 

Interestingly, Reed Hastings, CEO of Netflix, has stated in the past that his online streaming company is fine with password sharing, as long as the passwords are not being sold. Lost profits must be acceptable too, even if it is just a drop in the bucket for a $100 billion company like Netflix.

On the subject of monthly expenditures, our study found that cord-cutters are spending slightly more on streaming subscriptions than they were before they axed traditional cable. This is to be expected, as dropping cable creates a bigger demand for content; demand that is fulfilled by adding more online streaming services.

Additionally, current cable consumers are spending the least amount on online streaming services, $30.87, but their overall expenditure is still much higher due to more than $100 going towards cable each month.

 

The Future of Cable in Jeopardy?

Besides the data that shows cutting cable will save a considerable amount of money, a few results from our strictly cable subscriber survey produced disheartening news for the cable industry.

First, when we asked cable subscribers if they used their cable subscriptions or online streaming subscriptions more, the results were quite tight.

In close to a 50/50 split, 52.13 percent of cable subscribers say they use their cable more, but 47.87 percent stated they use their online streaming services more. As the years go by and cable is rendered useless, due to online streaming services becoming more robust, one would have to imagine these results will reverse.

Secondly, even the majority of cable subscribers answered that they would consider axing their TV cable subscription when posed the question. Chances are that if cable users are already thinking about cutting the cord in mass, it will happen eventually.

Third, and perhaps the most revealing statistic regarding cable’s future, our 500 cable-using respondents predict that they will cut the cord in increasing numbers as the years go by.

As the above graphic depicts, cable-subscribers will steadily become cord-cutters as the years go by. Most cable users (69.00 percent) figure they will stay have cable in one year. In three years, it becomes essentially a 50/50 split between those who will stay with cable (50.40 percent) and those who will have dropped cable (49.60 percent). In five years, the tables will have completely turned, and there will be more consumers that will have cut the cord (56.00 percent) than those who will remain loyal to traditional TV cable (44.00 percent).

​When it comes to the future of traditional TV cable, the writing is on the wall: Online streaming services will eventually render cable obsolete, whether that takes 10 years or three decades remains to be seen.

Methodology

All data and results featured in this report derived from two online polls commissioned by LendEDU and conducted online by polling company Pollfish. For each poll, a total of 500 respondents were polled. For the survey of 500 cord-cutters, a screener question was used to ensure each respondent had eliminated their traditional TV cable subscription within the past two years. For the survey of 500 cable subscribers, a screener question was also used to ensure each respondent currently had a traditional TV cable subscription.

For many of the questions, respondents were able to enter in a free numeric response within a given range. These results were gathered together and then averaged to determine many of the statistics that we used in this poll.

Each poll was run over a four-day span, starting on December 28th, 2017 and ending on December 31th, 2017. All respondents were asked to answer each question truthfully and to the best of their ability.

Image Copyright © Mr.TinDC

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