According to a recent study, cord cutting in the US continues to rise, with one in five viewers having fled from cable and satellite providers as of July, 2018. Moreover, while the trend will continue to over half the country by 2022, PayTV providers may be able to slow the trend down by integrating streaming services like Netflix and Hulu.
According to the research firm eMarketer, in the last twelve months, cord cutting has jumped by over 32%, about 1/3 faster than in the previous year. The result is that about 33 million viewers now get their TV based entertainment through streaming video options. The trend also estimates that cord cutting will continue to climb as over half the nation will have fled cable and satellite providers by the year 2021. What’s interesting is that while cord cutting is up in 2018, the trend also expects cord cutting to level off as the total number of households choosing streaming video options approaches the fifty percentile. By 2022, eMarketeer expects that cord cutting will only grow by about 10%, but will have reached over half the population.
Overall, the report finds that about 186.7 million US adults watch pay TV (either from satellite, cable or telco streaming) in 2018. Down nearly 4% from last year. The reason for the slowdown may be due to traditional TV providers making streaming video deals with Netflix to keep subscribers by giving them the content that they want. “Most of the major traditional TV providers [Charter, Comcast, Dish, etc.] now have some way to integrate with Netflix,” eMarketer senior forecasting analyst Christopher Bendtsen said. “With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow—but not stop—the losses.”
The trend is driven by the quality of original programming provided by services like Netflix, Amazon and others. “The main factor fueling growth of on-demand streaming platforms is their original content,” eMarketer principal analyst Paul Verna said. “Consumers increasingly choose services on the strength of the programming they offer, and the platforms are stepping up with billions in spending on premium shows.”
Consequently, the acceleration of cord-cutting is the availability of compelling and affordable live TV packages that are delivered via the internet without the need for installation fees or hardware. As for streaming video over the top services, YouTube continues to dominate the category, with over 192 million Americans (most of them below the age of 21) getting their streaming video content. Netflix is a distant second with about 147.5 million subscribers, and then Amazon and Hulu. Only about 17.1 million viewers watch HBO Now, and Sling TV brings up the rear with less than 7 million viewers.
The real irony is that cord cutters seek to avoid paying the ever rising cost of cable and satellite subscriptions, but all too often subscribe to more than one streaming service. When you add all their monthly streaming bills together, the savings are practically nonexistent. This leads many to believe that growth of cord cutting is now driven by original programming, and the freedom to choose video on demand, rather than be shoehorned into a cable subscription that offers more channels that people simply aren’t interested in.