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Cord cutting is accelerating in the US

26 Jul 2018 | Rasmus Larsen |

Despite attempts to turn set-top boxes into platforms with apps such as Netflix, pay TV providers in the US are losing millions of viewers. Cord cutting is accelerating, according to analyst company eMarketer.

Exodus picks up pace

There are still 186.7 million US adults who watch pay TV (cable, satellite or telco) but 33 million are no longer part of the aging TV business model. These viewers, defined as viewers who have unsubscribed and not returned, are switching to streaming services such as Amazon, Netflix, and HBO.

Analyst company eMarketer notes that “cord-cutting continues to outpace projections”. One year ago, it predicted that the number of cord cutters would grow 22% in 2018 but it has now upped its forecast to 33%.



A set-top box is not a platform

Pay TV is losing millions of customers despite attempts to integrate Netflix and other streaming services as well as offer discounts. Providers such as Comcast and Dish are trying to transform their set-top boxes into TV platforms much like the Amazon FireTV or Apple TV (tvOS).

- “Most of the major traditional TV providers now have some way to integrate with Netflix,” eMarketer senior forecasting analyst Christopher Bendtsen said. “These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn this year. With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow—but not stop—the losses.”

Some of the losses in the Pay TV segment are recouped by encouraging customers to switch to pay TV services packaged as streaming services. These include Sling TV, PlayStation Vue, YouTube TV, and others. However, even when including these, head count is way down. Instead, people are flocking to streaming services such as Amazon (88.7m), HBO Now (17.1m), Hulu (55m), Netflix (147.5m), and YouTube (192m).

eMarketer predicts that the group of cord cutters will grow to 55 million in 2022 but again this may turn out to be a conservative estimate.

- Source: eMarketer via Recode



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