TV 'Cord Cutters' Will Be The Majority By 2022
from the from-fringe-to-mainstream dept
The broadcast and TV sector spent the last fifteen years trying to claim that TV cord cutting (cancelling traditional TV and going with streaming or antenna broadcasts) wasn’t a real thing, or that it was only something done by losers. But it’s the cord cutters who’ll be getting the last laugh.
A new study (pdf) by the Convergence Research Group indicates that cord cutting, once denied to exist at all by the cable TV sector, is about to get even hotter. According to the report, 36% of US homes didn’t pay for “traditional” cable TV at the end of a particularly bloody year for the pay TV sector. The group estimates that total will grow to 42% of US households in 2020, and finally topple into a majority of consumers (54%) by 2022. That in turn is contributing to a notable drop in revenue from the major cable TV providers, down from $100 billion in 2019 to a predicted $94.8 billion this year.
If you’re worried about major giants like Comcast, AT&T and Verizon struggling, you shouldn’t. While their video profits will erode, their monopoly over broadband means they’ll simply be recouping that lost revenue by jacking up the price of your broadband connection (including usage caps and overage fees) in the massive number of uncompetitive US broadband markets:
“Being caught in the programmer versus independent OTT squeeze play hampers TV access provider revenue & margins, however as TV access providers are also Internet providers there are also benefits to facilitating the rise of OTT. Annual residential broadband revenue has more than doubled over the last decade & we forecast 2022 residential broadband access revenue will X with 2022 TV access revenue. Residential broadband subs surpassed TV subs in 2017.”
Another report by Trade Desk suggests that the pandemic will only accelerate the trend. In large part because one of the last major reasons people cling to fat, over-priced cable TV bundles (sports) are on hold for the foreseeable future:
“The company found that 64% of Americans have either cut the cord, are planning to drop their pay-TV subscriptions, or never subscribed in the first place. Of those households that do still have cable TV subscriptions, 11% plan to cut the cord by the end of the year. Trade Desk surveyed 2,600 Americans for the study.”
?With only a quarter of young professionals having any long-term interest in traditional cable TV, in a few years we won?t be talking about linear or cable TV at all. It will all be online and streaming,? said Brian Stempeck, Chief Strategy Officer, The Trade Desk. ?For broadcasters and advertisers, it?s now all about how quickly they can pivot to where the eyeballs are moving and many of them are already investing heavily in order to succeed in a world of connected TV.?
It’s not like the TV and broadcast sector didn’t have the better part of the last decade to prepare for this trend. But with the exception of a few companies most in the sector just keep pretending this trend didn’t exist, cozy and warm in their bogus belief that traditional TV would be a cash cow they could happily nurse for all eternity without ever having to innovate or (gasp) compete on price.