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The term “cord-cutter” is used a lot in the streaming age. Cord cutters are those who have switched from cable to streaming only. But what about cord-nevers?
The “Cord Nevers” represent a growing demographic. This changing market has led to many changes in the TV industry, especially when it comes to new devices, services, and marketing.
Read on to learn more about how cord-nevers affect CTV and OTT.
What is the difference between cord cutters and Cord Nevers
Let’s first and foremost break down these two TV buzzwords.
Cord Cutters- Who are cord cutters? customers who have, at some point, paid for a cable plan. Cord cutters have “cut the cable cord” to abandon their cable service.
Cord Nevers – On the contrary, a new group of viewers have not subscribed to a cable package: cord nevers. Cord nevers tend to be younger people who prefer streaming services as their main entertainment source. They may have been raised in a home with traditional TV, but they never paid for the service.
How big is the Cord Never population
You might be wondering how important the cord-never population is.
Answer: a lot and the numbers are only increasing.
Millennials and Gen Z’ers may still be reliant on traditional cable, but they are increasingly moving towards streaming-only entertainment. These younger generations will make up a larger percentage of TV customers in the future.
Cord Nevers now make up approximately 12% of the adult population, a huge increase of 9% since 2017. The total number of cord-nevers in the U.S. is now around 31 million. (Remember, these numbers were from three years earlier). Cord nevers have grown so rapidly in such a short time that it is safe to say they are quickly becoming an important demographic in the entertainment industry.
The average cord-never is 33 and has a median annual income of $52,800. 1 It’s clear that the younger generation, which used to pay for expensive cable plans, are now becoming adult professionals.
What is CTV? What is OTT
Let’s continue with the next topic: CTV vs OTT: 2
CTV_ CTV is the acronym for connected TV. A connected TV is any device that supports internet-based streaming and can be either built into or connected to a television. CTV devices are Roku, Amazon FireStick, and Apple TV.
OTT_ OTT is the term used to describe how streaming content is delivered on your streaming device. Netflix, Hulu, and HBO Max are all OTT services. Alternatives to cable, such as Fubo TV or Hulu + Live TV, are also considered OTT services. OTT can refer to any platform that uses a video-on-demand or streaming strategy.
History of OTT and CTV
Let’s take a look at the history of each service before we dive into the trends.
OTT OTT is one of the largest industries in the world. OTT started with simple beginnings, like renting a Netflix DVD or downloading a movie to your iPod nano. Companies like Netflix and Hulu started offering streaming services in the mid-to-late 2000s. Later, a few major corporations started dipping their feet in the OTT waters, leading to streaming services such as Disney+ and Amazon Prime Video.
Consumers have a wide range of OTT subscriptions available today, leading to a market that is diverse and has little unity under the streaming umbrella. Many cord-nevers prefer to pay multiple fees for different services than to subscribe to a single cable plan.
CTV – With the growing number of cordless devices, many companies are racing to create the best CTV product. The first major example of CTV can be attributed to TiVo’s record-and-watch-later model. CTV was dominated by gaming consoles like Xbox and Playstation before it became the mainstream.
The demand for devices to support OTT services has risen dramatically with the advent of these subscription-based services. Nearly all television companies now offer their own smart TVs, as well as plug-in devices by Roku, Amazon and Apple. By 2021, 82% of Americans will own a smart TV or another CTV device. This is up from 30% in 2011.
Bottom line OTT and CTV are closely related, and their relationship has led to each of their respective success.
Cord Nevers and CTV/OTT
Cord nevers have built a future for CTV and OTT that is more sustainable than cord-cutters. The prospect of “potential cable cutters” is a motivator for content providers to retain their current customers. It may be that they offer deals, require long-term agreements, or include OTT services in their packages.
Cord nevers make it hard for traditional cable companies to reach out to new customers. This is bad for cable, but it allows CTV and OTT to thrive.
Influence of OTT
There are several ways to draw cords with OTT services: 5
Number of programs acquired by the company
Original content that they create
Offer limited advertising or ad-free experiences
Viewers can watch their favorite programs at their own pace
You can pause, fast-forward, or rewind.
The binge-watching phenomena
Alternatively, certain disadvantages of the OTT model can influence whether a cord chooses never to subscribe.
High monthly bills
The content is not varied enough
You have too many OTT subscriptions.
No free trial offered
Too many ads
Incompatibility of their device (for instance, Netflix is not accessible via the Nintendo Switch gaming console, but Hulu is).
OTT services will be able to adjust their subscriptions for streaming services based on this feedback in order to maximize their audience. These factors may also influence cord-cutters or cable viewers, but it’s the cord-never population who truly understands how to turn streaming services into a household favorite.
Cord nevers are accustomed to convenience, and a seamless streaming service will allow companies to reach a wider audience. Cord Nevers are not tied to contracts or cable box installation, and they have a wide range of streaming options.
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