More Dutch consumers showing interest in cord-cutting

Monday 3 April 2017 | 12:29 CET | Background

The share of Dutch consumers who want to keep a traditional TV subscription in order to watch live TV has fallen significantly in recent years. In the first quarter of 2017, only 41 percent said they did not plan to cancel their TV subscription, down from 44 percent in the previous quarter and as high as 59 percent in Q1 2015. Around 5 percent said they expect to cancel their TV subscription within the next year, according to the latest figures from the Telecompaper Consumer Panel.

Another 5 percent expect to 'cut the cord' within two years, and a further 5 percent expect to eventually cancel their TV plan, but not within the next two years. The expectation is that these cord-cutters would then take a subscription to an OTT service, such as KPN Play or T-Mobile's Knippr, or they would rely on online VoD services, such as NLZiet, Netflix, Pathe Thuis, Videoland or Amazon Prime.

The total share saying 'yes', they do plan to cut the cord, is still fairly low. Given long-entrenched TV habits, many still appear wary about relying on online video. This may be due to concerns about the image quality and reliability of the services. We have also seen that a minimum number and type of channels need to be available online before many consumers would be interested in cancelling their current plans. 

Live TV is of course already available with OTT services such as Play van KPN and Knippr. Both are cheaper than a standard TV subscription. The recent video report from Telecompaper found that the two services have attracted respectively 60,000 and 10,000 customers. This is still very small compared to the standard TV services, and is unlikely to change soon as long as the operators keep promoting their usual TV packages

Households with children more interested

If we look at responses based on the household make-up, there are two significant differences between families with and without children. Only 39 percent of households with kids said they wouldn't cancel their TV subscription in order to watch online services, while 43 percent of those without children are not planning to cut the cord. 

This may be explained by the fact that families with children have less need for live TV. They may watch more online content (e.g. Youtube) or TV over catch-up at more convenient times. Another 12 percent of respondents with children said they don't plan to cancel their TV service because others in the household don't want to. This is only 8 percent among respondents without children at home.

20-somethings ready to cut cord

Across the different age groups, there are few surprises. Only 32 percent of 20-29 year-olds said they wouldn't cancel their TV subscription because they want to watch live TV. This percentage increases with age, reaching 48 percent of over-65s. A total 8 percent of 20-somethings said they would cut the cord within a year, falling to just 2 percent of people over 65 years old. Among the older age group, 2 percent expect to cut the cord within two years and another 2 percent sometime later than two years.

Interest in skinny bundle

The same survey asked those respondents not interested in cord-cutting whether they would be interested in taking a smaller TV package. The so-called 'skinny' bundle would include just the main Dutch channels. 

Among households with children, 12 percent of respondents said they wouldn't take a smaller plan because they want to have access to foreign channels. This increases to 17 percent of respondents in households without children. Families with children may find other channels more important, such as broadcasters targeting kids, than whether they still have the BBC or ARD.


Telfort customers more interested in smaller TV package

Looking at interest in a skinny bundle based on the current provider, Telfort subscribers showed the highest interest: 8 percent said they would take a smaller TV plan within a year and 11 percent sometime after two years. 

That compares to around 5 percent for both percentages at customers of other providers. This is likely due to Telfort customers being more cost-conscious, as the operator focuses on low-cost services. Telfort customers also watch foreign channels less than average. Only 10 percent said they wouldn't take a small TV package because they want to have access still to foreign broadcasters, compared to 15 percent across all providers.

KPN customers were more likely to say they want to hold on to other Dutch channels; 26 percent said this was a reason not to take a smaller TV package, compared to 21 percent in the total market. Another 5 percent of KPN customers said others in their household wouldn't want to make the change. That is 3 percent less than the total market. This is notable for a provider that targets families. 

Outlook: no major shift yet

The above figures are not likely to be a big source of concern for TV providers yet. Some have already come up with a response (Knippr, Play and Vodafone Anywhere) to the small group of cord-cutters. It will be interesting to see what the broadcasters' platform NLziet will offer in the way of live TV and whether this will encourage more people to give up their traditional TV subscription. ISPs offering standalone broadband, such as Fiber and Tweak, are already in position to capitalise on this trend. 

This research is based on the Telecompaper Consumer Panel. The survey was conducted in Q1 2017. Panel participants are aged 12-80, and results are stratified according to age, gender and education. For more information about research opportunities with the panel, please contact research@telecompaper.com


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