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Report: Younger Demo Emerging as ‘Cord-Nevers’

21 Jun, 2013 By: Erik Gruenwedel

While media, cable, satellite and telecommunication companies debate the impact of cord-cutting, a new Bernstein Research study says consumers under the age of 30 are increasingly bypassing pay TV altogether — opting instead for Internet-based video.

Multichannel video program distributors have continue to shed video subscribers with the belief that most are switching to over-the-top video services such as Netflix, Hulu and Amazon Prime Instant Video.

But in a series of focus groups conducted this week in New York City, the majority of respondents did not subscribe to pay TV, opting instead to pay for SVOD service or use a third party’s account, according to AllThingsD.com, which cited the Bernstein report.

Among the 15 members of the focus group, 66% used Netflix, while another 53% also used Hulu. Another 20% used YouTube, 13% used SVOD service Hulu +, while two respondents opted for Amazon and Aereo TV, respectively.

Another 40% of respondents used HBO Go, which means they subscribed to an MVPD operator (Time Warner, Verizon, or Cablevision), with monthly cable bills ranging from $50 to $90 each.

Notably, 33% of respondents admitted using a shard account to access SVOD service. One respondent didn’t subscribe to a pay TV or OTT service, spending about $30 a month on home entertainment. The same amount of another respondent spent accessing only Netflix, Hulu, Hulu+ and Amazon Prime Instant Video.  

A key takeaway from the focus groups is that all respondents are still beholden to paying for broadband Internet access — a growing (and higher margin) revenue stream for MVPDs. Bernstein also suggests that as these users age, they’ll be more likely to opt for bundled pay TV access.

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