Streaming services make it easy to cut cable cord
Thanks to streaming services, more than 50M Americans could quit cable within three years
If you are among the millions of Americans who have cut the cord from cable or other traditional pay-TV providers in exchange for streaming services such as Netflix, you are about to find yourself with a lot more company.
That’s the forecast from a study about cord-cutting and the streaming TV market from research firm eMarketer on Tuesday. EMarketer said that the use of so-called over the top (OTT) streaming services continues to grow and eat away at the position of pay-TV providers so much that this year, 33 million Americans will cut the cord. That would mark a 33 percent increase over a year ago and would be higher than the 27.1 million cord-cutters eMarketer had previously forecast for 2018.
And the influence of streaming video services such as Los Gatos-based Netflix and San Bruno-based YouTube on the payTV market is becoming so prevalent that eMarketer estimates that more than 50 million Americans will have cut the cord within three years.
Pay-TV providers have been dealing with the pressures of losing subscribers for years as customers look for ways to cut expenses by shedding TV packages often loaded with channels they rarely, if ever, watch. And it’s the desire to pick and choose entertainment providers based on specific content offerings that eMarketer said is behind the majority of cord-cutters’ reasons for dropping their pay-TV providers.
“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,” said eMarketer principal analyst Paul Verna. “Another factor driving 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.”
Emarketer said it estimates 186.7 million U.S. adults will watch pay TV this year, but that figure will fall by nearly 4 percent from 2017’s viewership levels.
In contrast to pay TV’s viewer figures, eMarketer said 192 million Americans are expected to watch streaming content from YouTube at least once a month this year, while Netflix will draw in almost 148 million monthly viewers, and Amazon will claim nearly 89 million viewers a month this year.
Neither Netflix, nor YouTube returned requests for comment on the cord-cutting issue.
On a conference call last week to discuss Netflix’s quarterly results,
Chief Executive Reed Hastings said of the competitive landscape for streaming TV, “We’re not going to be able to change it. And then our focus is on doing the best content we’ve ever done.”
As part of their efforts to retain their subscribers, pay-TV providers have begun taking steps toward making a sort of truce with Netflix and other streaming companies. Cable TV giants like Comcast, Charter and Cox all offer options that let their subscribers access and watch Netflix through their set-top boxes. Several providers also allow direct streaming of YouTube.
“The cord-cutting phenomenon and streaming ecosystem led by Netflix is only in the early innings of playing out worldwide given consumers are shifting to OTT at an accelerating rate,” said Dan Ives, chief strategy officer and
head of technology research at GBH Insights. “Traditional cable providers and media players are not going away with cord-cutting, but this trend has accelerated.”
And, eMarketer analyst Christopher Bendtsen said that despite the pay-TV companies’ efforts, the trend of losing subscribers to streaming services is one that will only continue to color the TVwatching habits of viewers.
“These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn (losses) this year,” 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.”