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Video Cord Cutting an International Trend

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S&P Dow Jones Indices

Considering the Risk from Future Carbon Prices

Empowering Public Private Collaboration in Infrastructure

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Video Cord Cutting an International Trend

O ur Consumer Insights surveys have found that, as a percentage of total internet households, U.S. video cord cutting (11%) is comparable to major countries in Europe and Asia. But the profiles of these video cord cutters could not be more different.

We tend to think of households dropping multichannel TV service as a uniquely American phenomenon. However, across the eight study countries, video cord cutting (as a percentage of internet HHs) is remarkably consistent, ranging from 7% in France to 15% in China. What differentiates countries is their overall pay TV penetration rate. Europe has a much higher percentage of households that have never had a multichannel TV service subscription than the U.S. or Asia. Poland stands out as the lone European market with a U.S.-level pay TV penetration rate (only 16% are non-subscribers) and low level of video cord never households (8%). We define a non-multichannel household as one that does not subscribe to a multichannel TV service.

Note that S&P Global Market Intelligence estimates that multichannel TV subscriptions in South Korea are 150% of total households. This is based on South Korea's reporting of multiple service subscriptions (e.g. analog cable and digital cable) per household.

How video-cord-cutter households receive TV entertainment also illustrates regional differences. For example, the survey data shows that relatively few video-cord-cutter households in China or South Korea rely on over-the-air broadcast TV. Half of video-cord-cutter households in China and more than two-thirds in South Korea receive TV entertainment via online video services. In contrast, the vast majority of video-cord-cutter households in European countries we surveyed rely on free OTA broadcast TV, supplemented increasingly by online video content. Our U.S. survey indicates a fairly even split of video-cord-cutter households using OTA broadcast TV (54%) and online video services (42%).

The survey data also shows that video cord cutters in China and South Korea are more likely to be young adults than in Europe or the U.S. For instance, over three-quarters (76%) of video cord cutters in China and 57% in South Korea are adults under 35 years of age. European video cord cutters tend to be older adults. Over half (51%) of video cord cutters in the U.K., along with 48% in Germany and 47% in France are adults 45 years or older. The U.S. survey data reveals that video cord cutting is distributed fairly evenly among adults ages 25-54.

We asked video-cord-cutter adults the primary reason for dropping their multichannel TV service subscription. Video cord cutters across the European study countries indicated either that they were satisfied viewing free OTA broadcast TV or that the cost of pay TV service is too high.

In the U.S., the cost of a multichannel TV service subscription is also the dominant reason for cutting the video cord. Neither OTA broadcast TV, nor online video services alone serve as full replacements for a multichannel TV service. But approximately one-quarter (27%) of U.S. video cord cutters indicated they are satisfied with either OTT video only or a combination of OTT/OTA TV programming.

Our Asia surveys found that the forces driving video cord cutting in China and South Korea are not alike. For example, over one-third (34%) of video cord cutters in China indicated they are satisfied with online TV content. Somewhat surprisingly, in South Korea — a country with huge internet bandwidth — online video is not a dominant factor in video cord cutting. Instead, the cost of pay TV service is the most cited reason for dropping the subscription.

In summary, our surveys found:

  • Video cord cutting is not a U.S.-centric trend, but is happening worldwide.
  • China has the highest percentage of video cord cutters, who are young adults preferring online video.
  • Video cord cutters in South Korea have a similar profile to China except that cost is the driving trend.
  • In Europe, video cord cutters tend to be older adults who take advantage of free OTA broadcast TV to lower expenses.
  • U.S. video cord cutting (as a percentage of internet HHs) is in line with other major countries. Video cord cutters come in all ages and are driven by the high cost of multichannel TV service. Both OTA and OTT video are used as replacement.

Considering the Risk from Future Carbon Prices

Along with the advent of the 2015 Paris Climate Agreement has come a growing understanding of the structural changes required across the global economy to shift to low- (or zero-) carbon, sustainable business practices.

The increasing regulation of carbon emissions through taxes, emissions trading schemes, and fossil fuel extraction fees is expected to feature prominently in global efforts to address climate change. Carbon prices are already implemented in 40 countries and 20 cities and regions. Average carbon prices could increase more than sevenfold to USD 120 per metric ton by 2030, as regulations aim to limit the average global temperature increase to 2 degrees Celsius, in accordance with the Paris Agreement.

S&P Dow Jones Indices launched the S&P Carbon Price Risk Adjusted Indices to embed future carbon price risk into today’s index constituents.

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How Can Banks Apply a Quantitative Lens on Climate Risk Exposure

Aligning with the Recommendations of the Taskforce on Climate Related Financial Disclosures (TCFD)

Dec. 03 2018 — The signals are clear: central banks and regulators are stepping up action to address the potential systemic risks to financial markets that climate change poses.

This means it will become increasingly necessary for banks to develop a deeper understanding of how climate issues could affect their businesses and those they finance. By effectively managing and responding to these issues, banks can not only help mitigate the risks, but also seize the opportunities presented from the transition to a lower-carbon economy. Trucost has worked with banks for more than a decade to support their climate-related analysis. This paper provides practical guidance to help banks manage and report key climate-related metrics, no matter what level of ambition they may have.

This paper is organized into five sections:

I. What is the TCFD Framework?

II. Measuring the Carbon Footprint of a Bank

III. Translating Climate Exposure into Financial Risk

IV. Incorporating Scenario Analysis

V. Creating Opportunities

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