Data released by ad tech provider The Trade Desk from two separate surveys indicates that cord-cutting could increase dramatically in 2021 and that advertisers are shifting budgets to connected TV (CTV) advertising. The Future of TV survey fielded by YouGov for The Trade Desk found that 27% of U.S. cable TV subscribers plan to cut the cord by the end of 2021, compared to 15% who planned to do so in 2020.

With the rise of streaming, there are more alternatives to pay-TV than ever, creating more incentive for consumers to drop their subscriptions. A 27% rate of cord-cutting in one year would be a significant increase from prior periods and would have major industry implications. By comparison, according to MoffettNathanson’s analysis of cord-cutting as of Q3 ’20, the traditional U.S. pay-TV industry contracted at a year-over-year rate of 7.4%.

Also worth noting is that virtual pay-TV providers have compensated for some of these losses and now have over 11 million subscribers. MoffettNathanson forecasts ongoing 7.5%-8% annual subscriber declines among traditional providers, with virtual providers compensating for about half the loss.

Covid has certainly scrambled many consumer behaviors, with increases in streaming well-reported. If the survey’s finding of a 27% cord-cutting intention rate came close to materializing it would be a big acceleration in the industry’s decline. While consumers’ intentions don’t always convert to actions, cord-cutting will continue to be closely monitored this year.

The survey also found strong support for ad-supported streaming services; 72% of respondents said they’d prefer services with a lower monthly fee and fewer ads, or services that are free with ads, to those with a higher monthly fee and no ads. These findings are consistent with prior data shared by services like CBS All Access and Hulu that offer both ad-supported and ad-free services, as the majority of each choose the former option.

Because of cord-cutting and other reasons, linear audiences are continuing to shrink, especially among younger audiences, with more time being spent using CTVs. Advertisers are taking notice and The Trade Desk reported that a separate survey of 150 advertisers, conducted by Advertiser Perceptions, found that for those who modified their campaign budgets due to Covid, CTV is now their top channel choice. These advertisers said CTV is now 18% of their ad spending. 59% of linear TV buyers said they’re reducing upfront commitments in 2021 and moving traditional TV spending to CTV.

The shift to CTV is prompting organizational change among ad buyers. 37% said they plan to hire new CTV-fluent talent, and 55% said they “plan to take steps” to ensure TV ad buyers can “navigate both linear and CTV channels.”

The Trade Desk said the research revealed CTV ad buyers have the following priorities: shifting from a content-first to audience-first approach, focusing on integrated cross-channel strategies, and focusing on non-traditional ad formats, particularly shorter ads