TV is changing. Cable and satellite TV subscribers peaked in 2012, and pay TV is losing millions of subscribers a year as consumers cut the cord and adopt Internet-based streaming services.
Consumers today watch more TV than ever – the average household watches nearly eight hours a day. More Americans own a TV than a computer or a smartphone. But they’re changing what they watch – and the way they watch. This year, six people will cut the cord every minute.
Here are five reasons we believe cord-cutting is set to accelerate in 2019:
1) Streaming is vastly improving the TV experience
Research suggests TV habits change long before a cable subscriber cuts the cord. Over the last 10 years, pay TV subscriptions are down more than 5% – and traditional live TV viewing is down more than 20%. Meanwhile, streaming is growing more than 40% year-over-year With more direct-to-consumer services, lower-priced devices, and free ad-supported content, the overall streaming experience has improved significantly. Access to live TV and DVR capabilities, easier content discovery, and improved video quality should help cord shavers leave pay TV behind.
2) Content providers are upping the ante
Streaming services are investing heavily in marketing. Hulu, Netflix, Sling, and YouTube TV have all advertised on national television. This year, streaming-first companies netted 30% of Emmy nominations. This chorus of promotion raises awareness not only about each service specifically but also about cord-cutting more broadly. Research from Roku finds that cord-cutters are more experimental than the average TV viewer. Often, advertising serves not only to promote and persuade but also to assure consumers they aren’t making a bad choice.
3) More focus on streaming sports
TV rights for the major sports leagues all come up for bid soon (MLB in 2021, the NFL in 2021/2022, the NHL in 2022, and the NBA in 2025). Since 2000, the median age of live TV sports viewers has increased for every major league. Facebook, Twitter, Yahoo and Amazon have all tested or purchased non-exclusive rights to air live games – and Amazon is now bidding for the regional Fox Sports networks. If a streaming service proposes an attractive licensing-plus-promotion deal — even for regional sports rights — more sports fans may pull the plug.
4) Cord cutting makes people feel thrifty
Cord cutting has increased in both good economic times and bad. During the 2008 recession, virtual MVPDs were only an idea and Netflix was primarily a DVD company. Yet cord cutting started to grow. Today, the average TV viewer doesn’t use most of their bundle, watching just 0.09% of all linear TV content accessible to them. Focus groups with cord-cutters make it clear that they value the feeling of beating the system and enjoying TV without the cable-industrial complex. With more video options, consumers are more price sensitive to expensive cable packages.
5) 5G should make it easier to stream
It is too early to know exactly how 5G might transform entertainment. As Carl Sagan said, “It was easy to predict mass car ownership but hard to predict Walmart.” However, if 5G, as expected, turns wireless companies into broadband companies, homes may have 4 to 5 options for Internet service instead of 1 to 2 now. Streaming may then serve as a selling point amid increased competition. Recent research from Roku found 80% of cord-cutters on the platform say they watch the same, if not more, TV than they did before cord-cutting.
