Zero-TV: Threat or Passing Fad?

We’re beginning to hear of a new phase in the electronic video universe, “Zero-TV” households.  It may sound familiar, like the new lower calorie sodas or sport drinks which tout less calories, sweeteners and sugar, and while there is a great deal of difference in their meanings, the effect on the television viewing public may hold some similar results;  less traditional television viewing. The term Zero-TV households, refers to those households who no longer watch traditional television offered by cable or satellite providers but who tend to stream video online, via computers, smartphones or tablets.

Nielsen’s Cross-Platform report provides informative data on the changes in the American consumer’s media behaviors. Their latest update to the report features new insights on Zero-TV households and indicate that more than 95% of Americans get their information and entertainment by watching TV in their living rooms through traditional cable or satellite channels.  While just relatively small five percent of viewers fall outside that traditional mold, the group is growing, from two million households in 2007 to five million today.

Some people have had it with TV and the 100-plus channel universe. They have begun to tire of the $100.00 per month bills and have begun to cut the ties with cable and satellite companies and most do not even access free television signals via an antenna, opting to watch shows and movies on the internet or their cellphone connections.  Is the traditional television delivery model facing major changes or is this new trend likely to be just another viewing option, reserved for a fragment of the total consumer audience?

Show creators and networks make money from Zero-TV households through deals with online video providers and from advertising on their own websites and apps, but broadcasters only get paid when they relay such programming in traditional ways.  Unless broadcasters can adapt to modern platforms, their revenue from Zero TV viewers will be zero.  “Getting broadcast programing on all the gizmos and gadgets like tablets, the backseats of a car, and laptops, is hugely important,” says Dennis Wharton, a spokesman for the National Association of Broadcasters (NAB).  The Zero TV segment is increasingly important, because the number of people signing up for traditional TV service has slowed to a standstill in the U.S.  Last year, the cable, satellite and telecoms providers added just 46,000 video customers collectively, according to research firm SNL Kagan. That is tiny when compared to the 974,000 new households created the year before.

Zero TVers tend to be younger, single and without children but the industry is monitoring the progress to determine if the targeted demographic will change their viewing ways as they grow older and into the more traditional households with children.  Even the Zero-TV market is fragmenting with a host of new buzz words to describe these non-traditionalist viewers. There are “cordcutters,”  those who stop paying for TV completely, and make do with online video and sometimes an antenna.  There are “cord-shavers,” who reduce the number of channels they subscribe to, or the number of rooms pay TV is in, to save money.  Then there are the “cordnevers,” young people who move out on their own and never set up a landline phone connection or a TV subscription. They usually make do with a broadband Internet connection, a computer, a cellphone and possibly a TV set that is not hooked up the traditional way.

The new market segments may be the equivalent of an infant lion in a room with an elephant, but cable and satellite providers should be aware that an infant carnivore, over-looked and under-estimated, can grow and nibble away at the heels of the larger more dominant mammal and eventually drop the behemoth.  As the wireless, mobile phenomenon continues to blaze across the technology landscape, changing forever the methods the public utilizes to communicate, shop, pay their bills and interact with one another socially, traditional television viewing providers of programming should be careful to modify their marketing strategy and viewing delivery products, lest they fall victim to this new consumer trend.

Could television consumers, long-accustomed to being enslaved by the service policies and arbitrary costs of traditional, deeply entrenched cable and satellite providers, be on the brink of perpetuating payback? We’d love to hear from our readers. Are you a cordcutter, cordshaver, or cordnever?

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