Yet Another Report Says The Rate Of TV Cord Cutting Is Worse Than Anybody Thought
from the not-just-a-river-in-Egypt dept
For years the traditional cable and broadcast industry has gone to comedic lengths to deny that cord cutting (getting rid of traditional cable TV) is real. First, we were told repeatedly that the phenomenon wasn't happening at all. Next, the industry acknowledged that sure -- a handful of people were ditching cable, but it didn't matter because the people doing so were losers living in their mom's basement. Then, we were told that cord cutting was real, but was only a minor phenomenon that would go away once Millennials started procreating.
Of course none of these talking points were true, but they helped cement a common belief among older cable and broadcast executives that the transformative shift to streaming video could be easily solved by doubling down on bad ideas. More price increases, more advertisements stuffed into each minute, more hubris, and more denial. Intentional blindness to justify the milking of a dying cash cow -- instead of adapting.
But we're slowly but surely reaching the point where the rise of the streaming video revolution can't be denied, with data indicating it's worse than anybody thought. While the pay TV sector lost another 1 million subscribers last quarter, those totals don't factor in those that bought a new home or rented a new apartment, but chose not to sign up for cable. Many of these folks are dubbed "cord nevers," having never bought into the value proposition of paying $130 more per month for a bloated bundle of largely-unwatched reality TV channels from a company that treats paying customers with disdain.
Meanwhile, a new report by eMarketer this week indicates that the pace of customer defections is notably higher than most previous estimates. The firm notes that it was forced to reduce its estimate for US TV ad spending due to faster-than-expected growth in cord-cutting:
"eMarketer expected a slowdown this year in TV ad sales, after 2016 benefited from both the Olympics and US presidential election,” said Monica Peart, eMarketer’s senior forecasting director. “However, traditional TV advertising is slowing even more than expected, as viewers switch their time and attention to the growing list of live streaming and over-the-top [OTT] platforms.”
All told, the firm predicts that by the end of this year, there will be 22.2 million consumers over the age of eighteen that have cut the cord, up 33.2% since 2016. And while there's still a whopping 196.3 million US adults that subscribe to traditional pay TV (cable, satellite, or telco), that tally is down 2.4% over 2016 levels, with the defection rate only accelerating. The cause? A strange idea known as competition and, by proxy, lower prices:
"The acceleration of cord-cutting is the result of several factors,” said eMarketer principal analyst Paul Verna. “First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s Sling TV. Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription. And third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”
As we've long noted, it wouldn't be particularly hard to nip this entire revolution in the bud. Entrenched cable providers simply have to shore up their abysmal customer service and lower rates for legacy TV. And while a few cable and broadcast executives are finally starting to get it, most would rather double down on lip service, bad ideas and price hikes in the false belief they get to nurse the dying cable cash cow in perpetuity.
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Filed Under: cable, cord cutting, internet, tv
Reader Comments
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Point of View
Worse... or better?
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If there are five shows you'd want to watch regularly, you have to pay for five different streaming services.
(Plus the streaming service that came with you cell phone contract, which shut down immediately after but which you're still paying for.)
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New charges
That is no excuse for failing to participate in the game. The new wrinkle of course, is that the "cut the cord" industry is acting more and more like the cable industry. Even to the point of reusing tired and bedraggled content from the Cable Industry.
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Re:
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It's not WORSE than anybody thought
Cord Cutting is BETTER than anybody thought.
(I've mentioned before.)
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"New home"
How can they tell the difference between those people and people who said they were moving so they'd be allowed to cancel?
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One big problem
So what if A&E, Viacom, TBS, Discovery, etc. each start their own? Each with their own monthly fee. The cord-cutting may no longer be practical.
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But seriously. Not everybody gets the opportunity to be forced to do whats in their best interest. They should take it.
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Re: It's not WORSE than anybody thought
yeah. whose worse are we talking about?
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Re: Point of View
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Re: One big problem
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Re:
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Re: One big problem
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Re: One big problem
If (probably: when) streaming gets too fractured to be worth the money, I'm just going to stop watching. I'm already "missing" several shows and movies that people around me seem to be into due to time constraints, yet I'm not getting the feeling I'm actually -missing- anything.
I need to catch up on my book-list anyway.
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Cutting the Cord on Wednesday!
Our bill is now going from nearly $300 , to $85 + fees and whatever we subscribe to on a month by month basis. (Kids mostly watch Japanese language shows, and the only thing I'll have to find elsewhere is "Rick and Morty".
All because Comcast tried to bump the broadcast TV Fee, and refused to remove ESPN. Those few measly dollars pushed the rest of the family over the edge.
One straw too many for the camel's back. Thank you Comcast. Goodbye!
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Re: Re: One big problem
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Re:
Streaming services allow you to shut off the service in the months you do not want it (off-season of the show you want) and turn it back on without some crazy $100 reconnection fee. You also don't have to content with a 17 year contract or whatever Comcast is forcing on people.
It would be simple for Comcast to compete on price, convenience, and service. They just don't. Their executives are focused on the next fiscal quarter and their bonus, not the health of the company long-term.
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Re: Re: It's not WORSE than anybody thought
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Re: One big problem
Just a modicum of self control, and you subscribe to one or two things, watch what you wanted, then quit. You don't really have to subscribe to EVERYTHING at once.
Some people react less optimally to boredom, that's fine too. Go outside and play. Visit a museum, donate blood, If you've got mobility issues like me, use the time for PT.
When the media companies inevitably play games and offer only a few episodes at a time, use the savings to buy the entire season on Blu-Ray or download.
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Re: "New home"
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Re: If the content didnt suck
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Realistically, only two are available for streaming; one for $7.99/month, and one for $79/year. And I'd disqualify one of those, because the show will only stream some time beyond its original release. From experience, that could mean five years later. The other service has a yearly contract.
The other shows are only available as "If you pay $130/month for cable with premium channels, then you may stream them."
But say all the shows were available for $8/month plus taxes each. And yes, they're each on a separate service. You're still looking at $50 month, at least a couple contracts, and five separate monthly bill payments. And you won't watch a couple of those services, because you'll STILL be pirating the shows to see them when they're released.
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Of course, the cable execs know exactly what the rate is
I think it's not that "the rate is higher than anybody thought", it's that the people that know the exact answer have no interest in making those (horrible) numbers public.
Really, it's just an "inside-baseball" statistic; advertisers buy ad time based on (projected) viewership, not on how many people can theoretically watch something. One would assume content providers selling their channels DO get the exact information (so they know what to pay/bill), but are under an NDA not to share it.
The one group that really needs to know this is investors, but they are not in a strong position to demand it.
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Re: Re: Re: One big problem
I'm 32 and with the exception of a few scripted shows that I specifically use streaming services to watch, YouTube has been providing my passive video entertainment since I ditched cable a few months ago. I've noticed that many younger people do the same thing. You're right, there'll be a big shock in about 5-10 years when the first post-millennial generation grows up and doesn't even consider cable.
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Re: Re: "New home"
Isn't that exactly what they said wasn't being counted as a lost subscriber?
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Re: New charges
I doubt this is a zero sum game as there are many who recently are finding it difficult to put food on the table and what is the first expense to be gotten rid of?
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Re: "New home"
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Re: Re: One big problem
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Cord Cutters Delight
There are a great many streaming options that offer livetv (including local channels) plus on-demand movies at half of the cost of cable:
PlayStation Vue
https://www.playstation.com/en-us/network/vue/
CenturyLink Stream
https://www.centurylinkstream.com/how-to-watch.php
Hulu
https://www.hulu.com/live-tv
DIRECTV NOW
https://www.directvnow.com/
Sling TV
https://www.sling.com/
If anyone knows of any other livetv streaming and movie on-demand services please post them.
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One Device to Stream Them All!
You don't even need to pay for a subscription to a service simply purchase a Roku for a one time flat fee connect it to the intertubes and you never have to pay for TV or movies again.
https://www.roku.com/index
You can simply use the Roku channel PlutoTV and watch all the shows/movies you can handle free (except for your intertube connection). There are hundreds of other free viewing options to choose from. Yes you have to watch commercials with the free viewing but the service is more than worth this minor inconvenience.
https://channelstore.roku.com/details/74519/pluto-tv
I have no financial stake in any of this.
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Re:
So you keep one service for a while, and when you've caught up on what you care about (or maybe not all caught up, but caught up as far as the most recent season that is entirely available), you drop that service and switch to another.
So maybe you have a couple general services that are worth keeping all time (like Netflix for the kids), and others you swap in and out depending on the time of year.
In other words, don't pay for more than two or three at any one time, and you still get access to everything you want, when you really want it.
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Re: Re: Re: Re: Re: One big problem
1) They can only watch at a fixed time.
2) There is no pause button.
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Re: Re: Re: One big problem
Then it is mission accomplished.
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Re: Re:
Some of the shows on my list, like Last Week Tonight and Samantha Bee, deal with current events. Watching them six months later ruins much of the enjoyment.
Anything with a fan base - like Star Trek: Discovery - is going to have a lot of discussion online. Much of it unavoidable. Watching it six months means you not only can't take part in the discussion, but plot points have already unavoidably been spoiled.
And some shows I just plain want to watch as they come out.
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What sucks....
What we do watch, we don't tend to watch live. We'll catch up using Kodi. So, while we're a DTV subscriber, it's primarily for the no caps on the Internet. When we had cable internet alone it started with no caps but they instituted caps and we went from paying $60/month to over $100/month with the overage fees.
What we have now has a slower overall speed than what we had with cable internet, but we have no caps so it balances out. We got a good deal on the bundle that we're paying about what we paid for Internet prior to caps (about $75/month) now. So it's a cat and mouse game with these reports.
What really needs to happen is the undbundling of content/Internet providers. That will level the playing field more. That and the caps get stopped. But we know that's not going to happen, it makes too much money for the ISP's.
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Re:
If they can still save half their monthly bill by going without 2 of the shows they want, many will do so and maybe catch up later. Plus, the people genuinely in the situation you describe are probably the outliers that cable companies pretended that cutters were.
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"And some shows I just plain want to watch as they come out."
On *your* list. That *you* want.
Why do you believe a majority of people share your tastes and requirements, and why do you think that everyone will have the same disparity of network availability that you expect in your region?
I don't think anyone's saying that you're wrong, it's just that your preference to subscribe to a large number of services every month to access every program you want is not necessarily what most other people will be willing to do. Most just will do without some shows, or swap and change their subscriptions according to show release.
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Re: One big problem
If I'm not mistaken, it was only Disney content (Marvel and Star Wars would continue), and only for new releases after the stated date (they wouldn't suddenly pull every title from the platform). Many outlets backtracked on the scary headlines when they found out the content of the deal, I believe.
"So what if A&E, Viacom, TBS, Discovery, etc. each start their own? Each with their own monthly fee. The cord-cutting may no longer be practical."
Only if you assume that everyone will pay for all of those. In reality, half the people paying for those on cable never watch them and so would never pay for them separately, while a majority of potential customers will not be able to afford to pay for everything and pay for a competitor instead. You literally have to be a company with the size, catalogue and brand recognition as a Disney or HBO for this sort of thing to work.
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And with the current trends, as more people wait until they can binge a season at a time, the timing of those conversations will also shift. You wouldn't necessarily have to give that up.
Or, you might just have to pick which ones you care enough about to be able to keep current. Game of Thrones seems to be one people want to watch right away, so maybe you keep the HBO subscription while the entire season runs... but while that's happening, you can drop something else, and then when the season ends, why keep it up the rest of the year?
This is the future... swapping packages in and out based on how much you want to pay and who is able to produce content you want to watch. And it's doubtful many people will be spending $100+ per month on the cable package. Most will find a way to get by for about half of that, even if it means giving up some things.
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