HOBOKEN, N.J.—While cutting the cord is often done as an effort to save money off traditional pay-TV services, it also typically leads to a surge to broadband usage, which in turn can open doors for other revenue opportunities for service providers.
This comes from a report by analytics company OpenVault on the third quarter of 2019 for the broadband industry. It’s primary finding was that cord cutters’ average broadband usage has reached 520.8 GB a month, an increase of 7% in Q3. That is almost double compared to the monthly weighted (usage-based billing and flat-rate billing) average subscriber's usage at 275.1 GB.
Among cord cutters, 12% qualify as “power users,” meaning people who consume more than 1 TB or more of data per month. That is nearly triple the weighted average subscribers in Q3 2019, who come in at 4.2%. In the last year, the total number of power users have increased by 62% year over year. OpenVault points to FRB subscribers as the drivers of that, noting that they sign up for 1 TB plans 30% more than UBB subscribers, and 64% more for 2 TB plans.
Even though lessening a bill is often cited as a reason for cutting the cord, OpenVault found that two-thirds of cord cutters maintained the same broadband packages, while 29% upgraded; 4% downgraded.
“A cord cutting event usually signals a need for faster broadband speeds,” the report reads. “Cord cutters are opting for high-bandwidth OTT services, and are using multiple devices in the home to consume video, often simultaneously. This behavior lends itself to higher speed, higher margin broadband packages to ensure an acceptable broadband CX and the cord cutting event is the best time for operators to educate customers an upsell them accordingly.”
Despite not reaching the usage numbers of cord cutters, monthly weighted average usage increased as well in Q3 by 25% (118.2 GB to 147.4 GB), signaling that consumption is increasing across the entire market.
OpenVault’s full report is available for download.