Washington Secrets

Economic bummer: 6.9 million homes ditch cable TV

By |
Photo - (Photo by Spencer Platt/Getty Images)
(Photo by Spencer Platt/Getty Images)
Paul Bedard,Washington Secrets

It started with homes, then cars, and now penny-pinching Americans, especially minorities, are giving up cable TV because they just can't afford it in the lingering recession.

Instead, they are switching back to free TV, improved with the recent switch to digital broadcast which requires a special antenna but eliminates the $70-$100 monthly cable, satellite or broadband service fee.

Industry officials had worried that Americans would begin "cord-cutting" in a shift to internet TV, but the recession is more to blame, not internet bling.

"It's not so much cord-cutting as cost-cutting that's motivating this. There's possibly recessionary issues here," said Dennis Wharton, spokesman for the National Association of Broadcasters.

An ownership survey conducted by GfK Media found that about 6.9 million homes abandoned pay TV last year, a shocking number that industry sources chalk up to the sagging economy. What's more, the survey found that the number of Americans watching only free-TV surged from 46 million to 54 million. GfK said that means about 18 percent of all homes with TVs, or 21 million, watch only free-TV, a jump from about 14 percent just five years ago.

"When asked why they cancelled TV service, the overwhelming majority, over 70%, cited cost-cutting; cord-cutting because of online options was cited by less than 20%," said Dave Tice senior vice president of GfK.

Younger Americans, minorities and low-income homes, socked by unemployment and the economy have jumped the cable ship in the highest numbers. The GfK poll found that minorities make up 44 percent of all broadcast-only homes.

But according to Wharton, the shift isn't all bad. He said that more and more cable-like shows are now on free digital broadcast, especially those for minorities. "There is sort of an explosion in free network programming," he said.

View article comments Leave a comment