Putting a firm number on how many are cord cutting
This year pay TV services will lose 700,000 subscribers, or 0.7 percent
January 18, 2017
Media buyers and planners are hungry for numbers that tell them definitively how much they should be worried about cord cutting.
The quarterly reports on pay TV subscribers from Comcast and DirecTV and the like help, of course, but they also show more volatility than full-year numbers.
So chew on this for a moment: There’s a new forecast that projects just how much cord cutting we’ll see in the coming year, and the two years beyond.
Instead, cord cutting will increase in three of the next four years, and total pay TV subscriptions will take a 5 percent hit from 2015 to 2020.
To put that in real numbers, 4.7 million people will cancel their pay TV subscriptions in that span.
That includes 700,000 this year, when the number of pay TV subscribers will slide to 98.7 million, down 0.7 percent.
Over the next few years, that percent will increase every year but one, peaking with a 1.4 percent decline in 2019.
By 2020, total pay subscriptions will decline to 95 million.
OTT rises as pay TV falls
Don’t mistake this drop as people falling out of love with television, eMarketer warns. While fewer will pay for cable or satellite services, they remain just as enamored as ever with TV entertainment.
They’ll simply be getting it from other sources, most notably over-the-top services. Subscriptions to those, such as Netflix and CBS All Access and HBO Go, will see huge gains.
In fact, OTT subscriptions will increase faster than pay TV will decrease.
“The bottom line is consumers love TV programming, whether it’s delivered via the internet, cable, satellite or antennas,” says eMarketer senior analyst Paul Verna.
“As long as that remains the case, content owners and distributors will be able to keep monetizing this content through advertising, subscriptions, or some combination of both.”
Less of a movement to cord shaving
This forecasts suggests cord shaving will not become quite the thing some had anticipated when cable and satellite providers began introducing so-called skinny bundles a couple years ago.
These packages were designed to entice those who had thought about cutting the cord to save money to continue subscribing, but at a lower price.
These skinny bundles include fewer cable channels and so are priced lower than traditional packages, at $20 to $40 per month. At that price, they can compete with other providers coming into the market with OTT alternatives, such as PlayStation’s Vue and Hulu’s soon-to-launch package.
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