Netflix subscribers continue to be far less likely to have cable or satellite TV than non-Netflix users, but the number of them that are cutting the cord hasn’t increased in the last year. In our annual survey of current Netflix subscribers, we found that 67% still have pay TV service (cable or satellite) – the same number as our 2015 survey.
While cord cutting seemed to have level off among Netflix subscribers over the last year, more of them are planning on dropping cable by this time next year. Furthermore, those with the streaming service are more satisfied and likelier to stick with Netflix than ever before. This is coming at a time when the company has made a move toward spending more money and placing more focus on creating original content than licensing content.
During a three-week period from July to August 2016, we conducted an online survey of 582 random current Netflix subscribers across the US (the survey was conducted completely independent from the CutCableToday brand). Our goal was to understand any changes in subscriber behavior that have occurred over the last year since we last conducted the same survey. We analyzed the paid services Netflix subscribers use to watch TV and movies, their satisfaction levels with these services, the things they look for when choosing TV services, and other relevant issues.
These are the multiple choice questions asked in our survey:
- Which paid service(s) to watch TV shows, movies, and other content do you USE (or have you TRIED)?
- Please describe your OPINION of the following paid services to watch TV shows, movies, and other content.
- How likely are you to be using each paid service 12 MONTHS FROM NOW?
- For any paid service (for TV, movies, etc.) you are looking to PURCHASE, how important is each feature in your decision?
- In choosing your personal service package (cable, satellite, online), how important is each set of content to you?
While the number of Netflix subscribers with pay TV has remained steady over the last year, Netflix users are still far less likely than those without the service to have cable or satellite television.
67% of Netflix customers still have cable or satellite TV, the same number as in 2015. But by comparison, 83% of American households still have pay TV.
When we conducted this survey last year at this time, we noted that there had been a huge drop in the number of Netflix subscribers with cable or satellite TV. In 2014, 80% of Netflix subscribers still had pay TV and 88% had it in 2010. While we expected to see even fewer Netflix subscribers who still had pay TV service this year, the number remain consistent with what we found in 2015. Live sports continued to be a commonly cited reason for keeping pay TV service. However, Netflix users are still significantly less likely to have pay TV than those without the service – 83% of all American households have cable according to the last year’s report from Leichtman Research Group.
“I was thinking of cutting the cord in January, however the options did not include enough sports for me.” (Female, age 45-54)
An increasing number of Netflix subscribers are planning on canceling their cable in the next 12 months.
11% of Netflix subscribers with cable or satellite TV say they are “not likely” to still have their pay TV service one year from now; 15% are unsure if they’ll keep their pay TV.
While the number of Netflix users who still have pay TV service has remained steady over the last year, there has been an increase in those who are planning on cutting the cord. Last year, 9% of subscribers said they weren’t likely to keep their cable or satellite for another year; this year 11% stated they would likely cut the cord. As cable replacement streaming services like Sling TV and PlayStation Vue continue to gain mainstream traction, it certainly seems possible that more Netflix subscribers could finally get rid of cable TV.
“The days of ‘traditional cable and terrestrial TV’ are over. If the content is not coming in via internet where I can watch on any device at any time forget about it.” (Male, age 45-54)
94.5% of Netflix subscribers are satisfied with the service and planning to keep it.
Netflix customer satisfaction has increased year-over-year, despite minor price increases and changes to content library.
Over the last year, Netflix has continued to change the face of its content offerings, focusing more on its original programming and less on licensed content. At the same time, the company also increased the price of its most popular plan, standard HD service, from $7.99 to $9.99 a month, a 25% increase. Despite a shrinking content library and higher price point, customers are more satisfied with Netflix than ever before. The company earned a 94.5% satisfaction rating in our survey, up from 92% last year.
Pay TV bundles continue to play a role in keeping Netflix subscribers from cutting the cord.
80% of Netflix subscribers with cable or satellite have their pay TV bundled with internet and/or phone service.
The service bundle is arguably the best weapon cable companies have against cord cutting. By offering customers lower rates on their TV, internet, and even phone service if they bundle them together – and conversely threatening them with increased prices if they drop their TV service – cable companies are able to keep many customers from cutting the cord, even if those customers don’t like or use the TV service.
“I’m a cord cutter with cable only because Comcast offered a better deal to get the cable box AND internet (vs. just internet). Which is crazy.” (Female, age 25-34)
“I’m on the fence about letting go of cable since i pay for so many other streaming services but with the bundle of internet and cable the savings has me continuing to hold off from ‘cutting the cord'” (Female, age 25-34)
“I only stay with cable because the total pricing of those items that are bundled is less than ala carte purchasing. I would love to ditch cable if I could keep my internet price low and have sources of 24-hour news.” (Male, age 45-54)
The Significance of These Findings
While cord cutting hasn’t accelerated among Netflix subscribers during the past year, many subscribers indicated they planned to get rid of their cable or satellite TV service in the next year. And with Sling TV and PlayStation Vue both launching national ad campaigns to raise awareness for their live streaming, cable TV replacement services, we expect more Netflix users to drop their pay TV service in favor of a more affordable offering that offers the programming they care about.