In US, 12M cut broadband cord; Trick or trend? Time will tell

12 million cut broadband cord mobile

Smartphones have been an important part of the streaming video ecosystem for years, but they also play a major role in how consumers access the internet from home. A new study from Parks Associates says more than 12 million US households have cancelled wired broadband connections and now access the Internet through mobile devices.

Parks, in its study, Adoption and Perception of Broadband, said that brings the total to more than 15 million US HH. About three million of them have never had a wired Internet connection at home.

Among the reasons consumers have ditched their traditional internet connections? Cost, slow speeds and poor customer experience?

If it sounds familiar, it should.

The 12 million subscribers who cancelled their pay-TV services in 2019 and 2020 often cite the same issues, although content availability from a burgeoning array of OTT video services also has played a major role.

Broadband has been a cash cow for operators

Interestingly, operators have seen huge growth in their broadband businesses over the past six years, even as pay-TV cord cutting has intensified.

Comcast and Charter, for example, each added 3.4 million broadband subscribers in 2019 and 2020 combined.

While operators for the past several years have appeared unable to defend against the flood of pay-TV cord cutting, but Parks has some suggestions for holding back a similar tide of broadband cord cutters.

The researcher said increasing broadband speeds and providing devices to households aimed at improving Wi-Fi coverage (in the form of, say, mesh networks) could help reduce service cancellations and reduce churn. Parks found 75% of 10,000 households it surveyed who said they were likely to switch providers would stay with their current provider if offered these solutions.

Wi-Fi networking at home has become the norm for most U.S. broadband households, with 94% saying they use the technology. More than half said the technology can be problematic.

Parks reports that 41% of US broadband households were engaged in remote work or remote schooling, increasing as the pandemic has had an enormous impact on work and education.

Still, some operators are raising prices or adding data caps. Comcast only recently delayed a plan to charge customers who went over a 1.2TB data cap $10 for every additional 50GB they used, up to a maximum of $100. It will wait until July to expand the plan in a dozen Northeast states.

The bottom Line

Virtually all pay-TV service providers in the U.S. have been hit hard by consumers trend away from traditional pay TV and toward over-the-top video entertainment, both subscription-based and ad-based. And almost all of them have taken pains to point out that they were no longer as focused on their pay-TV businesses as they were on becoming connectivity companies, delivering broadband via wireless and, increasingly wireless means.

It’s the wireless delivery that has legs over the long term, especially as 5G gathers steam and market share.

Globally, more than 60% of all video is delivered to smartphones, according to Brightcove’s Q3 Video Index, a number that has increased through Q4 (that report will be available soon).

For OTT services looking to maintain their relevancy, especially among younger users in the Millennial and Gen Edge generations, that’s crucial to remember.

Stay tuned and stay well.

Jim O’Neill is Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn