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Cord-Cutting Creep: Nearly 25% Of U.S. Homes Look Beyond Cable & Satellite

Cord cutting continues its slow invasion of U.S. homes, according to a new study from GfK, with adoption rates making plodding gains.

According to GfK’s “2016 Ownership and Trend Report,” 17 percent of U.S. TV households now rely on over-the-air (OTA) broadcasts, a slight uptick from 2015’s 15 percent. An additional 6 percent of survey participants said they lack traditional broadcast or pay-TV reception at all, using only Internet services like Netflix or Hulu. This is up from 4 percent one year ago.

Not surprisingly, millennials were more likely to opt out of cable and satellite. Twenty-two percent  of TV households with a resident 18 to 34 years old watched OTA broadcasts (compared with 17 percent of all U.S. households), while 13 percent only watch an Internet service on TV (vs. 6 percent of all TV homes).

Overall, 38 percent of 18- to 34-year-old households rely on some kind of alternative TV reception or video source, compared with 25 percent of all homes.

See also: Millennials Lead Way Among OTT-Only Households

Meanwhile, households with at least one resident age 50 or older are more likely to subscribe to cable or satellite services. Eighty-two percent of survey respondents had a pay-TV subscription vs. 75 percent of all U.S. TV households. Cable subscriptions, rather than satellite, took the lion’s share, said GfK, with 46 percent of 50 or older homes paying for cable reception, compared with a U.S. average of 41 percent.

“The fact that a statistically significant increase in broadcast-only reception occurred over just one year may be further proof that the cord-cutting/cord-never phenomenon is accelerating,” said David Tice, GfK media and entertainment practice senior VP. “If you include homes that have no TVs at all — about 3 percent of all households — then less than three-quarters (73 percent) of U.S. homes continue to have pay-TV service, with the attendant implications for all stakeholders — not just the pay TV services themselves, but also networks, content providers and advertisers.”

Other findings from the study: Broadcast-only reception is more common in TV households earning under $30,000 per year (26 percent vs. 17 percent among all TV homes), while homes with incomes of $50,000 a year or more post higher levels of satellite subscription (27 percent vs. 21 percent).