Cord cutters who opt for streaming video services instead of traditional pay TV will inevitably increase their broadband consumption. But some new research says increases can be tracked up to the point of cord cutting.
OpenVault’s second-quarter Broadband Industry report found that consumers exhibit steadily increasing broadband consumption in the months before ultimately deciding to cut the cord. The firm’s analysis shows that the difference in usage between cord cutters and average subscribers rose from 14% six months before the event to 20% in the month immediately prior and 30% in the month that the cord was cut. In the three months after cutting the cord, the difference rose to nearly 70%.
OpenVault compiled the aggregate consumption of millions of subscribers to show the difference between internet-only households and those who have a bundled package of pay TV and broadband services. Among Internet-only households, average bandwidth consumption in second quarter was 390.42 GB, while bundled subscribers consumed, on average, 210.89 GB of data – which amounts to a difference of 85%.
As 4K content becomes more readily available on services including Netflix and Amazon Prime Video, broadband subscribers who stream the higher resolution content can expect to push past their data caps and become power users. OpenVault said the amount of broadband subscribers in the U.S. that use more than 1 TB per month reached 4% in the first quarter, up from 2% one year prior. As Bloomberg pointed out, it’s led more broadband subscribers to encounter overage fees.
OpenVault said usage-based billing helps in limiting the number of power users. When compared with subscribers on flat rate billing plans, usage-based billing subscribers were 23% less likely to exceed 1 TB of usage and 61% less likely to exceed 2 TB.
“While Usage-Based Billing often is considered as a revenue enhancing tool, the reality is that it spurs subscribers to find harmony between their broadband speeds and their usage patterns,” said Josh Barstow, executive vice president of corporate strategy and business development for OpenVault, in a statement.