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The AP is reporting that broadcasters are beginning to worry about “Zero TV” households, a demographic that has risen by 3 million to 5 million households since 2007. Not surprisingly Netflix started offering unlimited streaming in 2008, and there was the Great Recession, which has caused people everywhere to get creative in their cost cutting measures. Granted, this is still a small population when you consider that there are 100 million TV owning homes in the US.
Nielsen, a company that measures viewership and ad performance on all forms of media, has created a new category called “Zero TV” households because:
they fall outside the traditional definition of a TV home.
What is a Zero TV Household?
You actually can have a TV and still be in the group. 75% of ZTV households still have a television. However, none of them subscribe to traditional cable or satellite programming. Basically, cable/satellite companies don't have you padding their bank accounts with your money every month and that scares them. According to Nielsen, only 18% of ZTV households even want to add satellite/cable subscriptions. Most ZTV households are happy to get over the air programming, use online streaming, or just forego the TV and network media all together.
This is not good news for an industry that barely expanded last year. Even though nearly 1 million new households were created last year, only a net of 50,000 customers were added to cable and satellite subscription plans. On 100,000,000 TV households, that's only a .005% growth. Not good for any market.
ZTV households tend to be young, single, and without children, according to the Nielsen study. Basically, the people still having fun in life. (I joke…but seriously…)
The new buzz word that describes my particular demographic is “cord-nevers:”
- Never had a landline phone connection
- Never had a TV subscription
I didn't realize I was so cutting edge! Growing up, my parents always had a TV, but we usually never had more than a dozen channels. I went to college without a TV, found one for free in a dumpster (move out day was awesome for this), and when I reported for my first active duty assignment after college graduation I didn't bring a TV.
So, since 2010 I've lived without a TV and a cable or satellite subscription. How much have I saved? I would probably never buy the premium channels anyways so let's figure $50 a month for a basic package, plus $1000 for a nice HDTV:
$50 * 12 * 3 = $1800 + $1000 HDTV = $2800
Nearly $3000 over 3 years. That's almost the price of the used car I bought. That's enough money for an amazing vacation almost anywhere in the world, airfare included. That's a lot of beer.
Even more importantly than the money I've saved is the time I've had to spend on other activities. The average American over 2 watches 4.8 hours of TV per day. After sleeping, eating, and work or school, that doesn't leave much time for meaningful and productive activities!
I'm not saying all TV watching is bad. Heck, I watch a ton of movies and TV, and probably spend a lot more than 4.8 hours a day on the Internet. The point is I've thought about how I spend my time and money.
I like blogging, I like learning about new forms of investment, and I like reading. I like watching the entire season of TV shows at a time rather than waiting like a dog for the network to hand me my treat once a week in the form of a new episode. Because of this, I've decided cable isn't the best way to spend my hard earned dollars and my limited time on this Earth.
Have you ever thought about how much time you spend watching TV? Is it something you very much enjoy? Is there anything else you'd rather do with your day? Remember, just because you cancel your subscription doesn't mean you can't still watch your favorite shows. Online streaming from the network sites, Amazon Prime, Netflix, over the air programming: these are all legal, legitimate, and cost and time efficient ways of getting your dose of Game of Thrones or Madmen.
Why Are Media Companies Worried About ZTV Households?
Media companies are worried about ZTV households because under current contracts they only receive payment for TV viewers, not online or other media.
This is obviously an archaic method of compensation. The companies will have to adapt fast or be overtaken by newcomers in the media market, like Amazon (with it's Amazon Prime service for $79/year) or Netflix ($7.99/month).
Cord-nevers and Cord-cutters
Frankly, I've never understood forking over $100 per month for a million channels, none of which have anything good on.
If you've tasted the forbidden fruit by signing up for a cable/satellite subscription, it's not too late to come back to the good life. You could become a cord-cutter, someone who once had a subscription, but has since seen the light. You too can cut out the biggest waste of time in your day and potentially the most expensive entertainment you can pay for. Plus, you just might be saving your life by cancelling cable.
So what are you waiting for? Start living the good life today. Cut the crap, save for what matters to you. If you don't want to cancel your subscription, at least call to get a lower rate on your cable bill.
Are you a Zero TV household? If you're not, should you be?