Subscribers are leaving classic pay TV providers at an increasing rate in the US, as streaming services are becoming more popular, according to data from the WSJ.
Cord Cutting is a trend
Industry watchers have talked about cord cutting for years, but last year was actually the first sign of a real decline in TV subscribers. So far, people are mostly “cord shaving” - downgrading to a smaller TV subscription.
As a clever man once said; “we tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run”. This is probably true for the TV business, too, as the trend seems to be accelerating. As of Q3 2014, more than 220.000 subscribers have cut the cord this year.
Instead, TV viewers gravitate toward streaming services that offer lower prices and on-demand content that you can watch when you have time. And if you ask the House of Cards producer he will say that “appointment TV” is dead.
So far, many content providers have been reluctant to abandon cable TV, but HBO, CBS and most recently Starz announced plans to launch stand-alone streaming services. HBO’s streaming service will launch in 2015.
The same trend is visible in some regions of Europe, mostly markets with high broadband penetration that also happens to be most of the markets that Netflix has entered in recent years.