Understanding the drivers of cable TV cord shaving with big data

Abstract

Over the years over-the-top (OTT) platforms such as Netflix and Hulu have attracted a lot of customers and caused serious disruptions in the media and advertising industry. This paper examines the underlying cause of such a disruption by using big data from one of the leading multi-system operators (MSO) in the US, which provides cable TV, phone and Internet services to multiple communities. More specifically, the dataset allows us to model the behaviour of 267,276 unique households, who collectively watched 270,718 unique programs and examine the effects of online video consumption, different genres, and use of additional cable services on cord shaving. The findings suggest the most important predictors of cord shaving are video on demand and time spent watching different genres, especially live sports and news. Finally, we discuss the practical implications of the research for content distributors, content providers, and advertisers.