27% Of Cable TV Subscribers Will Cut The Cord This Year

from the there's-more-where-that-came-from dept

The cable industry was already struggling last year, when a record number of cable customers "cut the cord" and flocked to over the air or streaming alternatives. That was before a pandemic came to town. Now, with live sports less consistent and folks desperate to cut costs as they struggle to pay rent, the trend simply exploded in 2020. The number of folks still paying for traditional cable has now dropped 22.8% from pay TV's peak back in 2014. But by the end of 2024, analysts expect that fewer than half of US homes will subscribe to a traditional pay TV service.

It's a trend that's expected to accelerate dramatically in 2021. One new survey by The Trade Desk indicates that another 27 percent of US households are planning to cut cable TV from their budgets this year:

"American households are cutting the cord on their cable subscriptions more rapidly than previously reported, according to the second Future of TV survey of more than 2,100 U.S. consumers by The Trade Desk (Nasdaq: TTD). The data shows 27 percent of U.S. cable TV subscribers are planning to cut their subscriptions by the end of 2021. That percentage is nearly double the 15 percent of cable subscribers who reported cutting the cord in 2020, and significantly higher than the approximate 3 percent annual decline reported by eMarketer prior to 2020."

That's quite an explosion for a trend that cable and broadcast executives have spent the last decade trying to pretend wasn't actually happening (it was), wasn't a big deal (it was), was only something poor losers do (studies have repeatedly proven this claim false) or would rebound once Millennials began seriously procreating (that didn't happen). At every step of the way executives have been wrong about this phenomenon.

Even as the data clearly showed that consumers were cutting traditional, expensive cable TV service even faster than ever, some cable execs and analysts continued to try and claim that 2020 and 2021 would see a reversal in this trend. Again, that's simply not true:

"COVID has accelerated cord-cutting trends that were already underway, to a point where less than 50 percent of U.S. households today have a cable subscription. It’s not because U.S. consumers have fallen out of love with TV, but that there are now more convenient ways of consuming it. That even applies to traditional cable mainstays, such as live sports,” said Tim Sims, Chief Revenue Officer, The Trade Desk. “As more broadcasters launch and expand their streaming services, these gaps are only going to widen."

Don't feel too badly for cable and telecom giants, however. With a neutered FCC and little competition, most providers are simply planning to recoup their pound of lost flesh by doubling down on broadband rate hikes thanks to persistent monopolization we refuse to do anything about.

Filed Under: broadband, cable, cut the cord

1.28 Million US Residents Cut The TV Cord Last Quarter

from the head-in-the-sand dept

It seems like only yesterday that the TV sector was busy insisting that TV cord cutting was a "fiction." Once that claim was proven hollow by the data, plenty of industry folks shifted toward claiming that the trend was being over-hyped and only temporary. Many claimed the trend would reverse itself once the housing markets stabilized (didn't happen) or Millennials started to procreate (didn't happen). Often, angry users who cut the cord (usually due to high prices or terrible customer service) were brushed side by executives and analysts as being irrelevant nobodies.

And while many in the TV sector now like to insist they saw the problem coming all along, it's genuinely embarrassing how many industry execs tried to wish the rise of additional competition away, believing that if they stuck their head deeply enough in terra firma, this major industry trend would just somehow go away.

It's not going away. With 2019's first quarter earnings in the books, data indicates that cord cutting continues to heat up, with another 1.28 million American consumers ditching traditional cable TV in the first quarter alone.

American cable giants like Comcast and Charter Spectrum were hard hit, but not quite as badly as satellite TV providers, who are losing customers in droves:

"Both Charter and Comcast saw their pay TV subscriber losses accelerate this quarter. Charter lost a net 145,000 video subscribers, up from 111,000 one year ago, and Comcast lost a net 121,000 video subscribers, up from 96,000 one year ago.

But it was DirecTV and Dish Network that sustained the most damage. AT&T’s total net video losses during the quarter totaled 627,000 – a net loss of 544,000 traditional video subscribers and 83,000 streaming TV subscribers. Dish lost approximately 266,000 satellite subscribers, a number that was only partially offset by 7,000 added Sling TV subscribers.

The irony here is that companies like AT&T actually saw the cord cutting threat coming and tried to get out ahead of it by offering a streaming service of their own (DirecTV Now). But AT&T's obsession with growth for growth's sake resulted in it paying more than $150 billion on mega mergers (DirecTV in 2015 and Time Warner in 2018) that saddled it with oceans of debt. To pay down this debt, AT&T began imposing annoying rate hikes on its streaming and traditional TV customers alike, only accelerating the defections. Not a brilliant strategy in hindsight.

Those best positioned to fight off the cord cutting threat remain cable giants like Charter Spectrum and Comcast. They've increasingly enjoyed significant regional monopolies over broadband. As a result they've imposed (technically) unnecessary usage caps and overage fees that not only jack up the cost of broadband overall, but punish those users who migrate to streaming with additional monthly costs. In other words, as they lose money on TV from competition, they'll just extract their pound of flesh in the form of higher broadband bills on captive customers stuck in markets with zero meaningful broadband competition.

Filed Under: broadband, cable, cut the cord, tv