Cable TV Cord Cutting Continues To Set Records, Though Streaming TV Is Slowing Down Too

from the price-hikes-ahoy dept

For more than a decade, cable TV executives brushed aside the threat of cable TV “cord cutting” as either a nonexistent threat or a temporary phenomenon. Of course neither wound up being true, and consumer defections from the bloated, pricey traditional cable TV bundle continue to set records during the COVID crisis. Traditional cable TV providers saw a 6.2% drop in subscribers in the third quarter of 2021, an all time record. It’s particularly bad for traditional satellite TV providers, who saw a 12% dip in overall users during the same quarter.

But it’s not just traditional cable that’s feeling the pinch. Growth in new streaming alternatives is also slowing down:

Growth slowed for virtual multichannel video programming distributors (MVPDs) in the third quarter of 2021, as the category added just under 1 million subscribers compared to 1.7 million new subscribers a year ago…Including the modest gains for the vMVPDs, total pay TV distribution was down 5.2% in the third quarter, the biggest drop since the 5.5% decline in the second quarter of 2020…”

While streaming alternatives are still doing well, and still pulling subscribers away from traditional cable TV, the slowdown has many causes. One being that traditional streaming increasingly mirrors the habits of the broader TV sector, with broadcasters driving a consistent drum beat of consumer price hikes without expanding service offerings or increasing value to the end user:

“Six years ago, everyone burst out of the gate with eye-popping low prices,? MoffettNathanson said in a report Tuesday (January 5). ?That helped them get out of the gate, but it undermined their longer-term prospects in two ways.”

The first issue was that the vMVPDs attracted price-sensitive consumers. The second issue is that the vMVPDs would have to their raise prices faster than traditional distributors as content companies increased their license fees.

The other driving factor is that younger generations just don’t watch as much television overall, with time traditionally spent binge watching TV series instead going toward binge watching YouTube and TikTok. That’s not to say that more traditional isn’t popular. Newer streaming TV providers now have 14.2 million subscribers, and traditional TV is expected to still lay claim to 72.7 million subscribers by 2023, albeit down from 100.5 million subscribers one decade earlier.

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Vidiot (profile) says:

Next wave?

Can’t wait to see the next reportable set of statistics: when streaming platforms’ uptake is besieged by programming fragmentation. We’ve seen it in our household… hooked on a favorite (bingeable) series, only to find that the license is yanked from that service and moved to another. Do we follow? Reject the old one, or keep it? We’ve probably seen it a half dozen times, and it’s not a new phenomenon — probably over the last three years, but getting way more common. And have I added subscriptions for every new service my favs have migrated to? Of course not… I’d be back in the cable TV "triple play" price range in a heartbeat. And last week, the new Paramount service pulled all extant licenses for any flavor of Star Trek, consolidated now under their premium-priced roof. Will they (and others) see pushback? Will I have to pull out some old standard-def DVD’s?

This comment has been deemed insightful by the community.
ThatDevilTech says:

Re: Next wave?

Welcome the return of piracy, not that it’s truly left completely. Thank you Kodi for allowing me to watch shows I might want to watch, although I’ve gone to mostly watching YouTube when not watching sports. So, for me, old-school tv is dead overall. If we watch anything, it’s from the DVR, so rarely live.

Glenn says:

Yep, bloated and pricey (i.e. mostly stuff I don’t care about, don’t want). Now, I was one with DirecTV during its first 10 years of service, and it was GREAT (before AT&T ruined it). But that was then. If I’m viewing a screen these days, then I’m probably reading a book.

The first, biggest show-stopper for me now with "cable TV" is I don’t want their hardware. I bought my own DirecTV receivers–first a Sony, then a DirecTiVo; both were excellent. Yep, if the cable providers had only embraced CableCards, then they might still be relevant… but they didn’t, so they aren’t. Of course, that’s the least of their bad choices.

My own hardware and my choices about what services I want would at least get me to consider cable TV. As it is though, there’s nothing to consider.

Anonymous Coward says:

Essentially, at the start of TV, you had 3, maybe 4 OTA channels to choose from. They each created or syndicated their own content, and fought for viewership.

Then came Cable TV, and cross-syndication. Now you could buy a package with multiple content creators in the same channels, and thanks to the magic of the VCR, you could time shift the content so that you could watch BOTH of the two great shows that were on competing TV channels during prime time.

The creators then profited off this by boxing their shows for first VHS, then DVD. As a result, all those creators ended up clumping together and getting bought by a limited number of those original TV broadcasters to increase efficiency and continue to make a profit.

Then the Internet hit, and VHS piracy was replaced with Internet Piracy. Out of this came Netflix, where you could order a steady stream of DVDs delivered to your door every month. Suddenly, everyone was trying to get Netflix to serve up THEIR content. Because it proved that people would pay and not pirate if there was a convenient way to get the content.

Internet 2.0 came along, and Netflix went all-digital. As a result, those TV broadcasters realized they could do essentially the same thing, and Hulu was born, serving up content from all of them.

And then things did the inevitable, and history repeated… each TV broadcaster started up its own online service and consolidated shows and exclusives and pulled content from the likes of Netflix and Prime. But they offered really good subscriptions to get people to follow the content to its new home, even if they weren’t making a short-term profit.

And now that’s over, and we’re back to square 1, with a limited set of distributors controlling the content creation, and people having to choose between streaming services because the rates are getting too high to justify paying for all of them every month when you’re already paying cable Internet access fees.

Yeah; I skipped over Satellite TV and Prime Video and the P2P video craze, but those are all really just symptoms of the outline above.

So looking at history, at some point the current contraction of control will get too tight and some third party will come along and disrupt things again. Just like Shakespeare bringing quality live acting entertainment to the common people.

This comment has been deemed insightful by the community.
TFG says:

Re: Re:

The correct view of piracy is a follows:
"Those who pirated would have simply chosen to go without, if the pirated version was not there."

In other words, you didn’t lose the sale because of piracy – you lost the sale because of other factors. Your offering was not good enough for the customer to consider it worth it – no different from someone popping their head into a restaurant, considering what’s on offer, and then leaving without ordering anything.

I think the entertainment vendors have a disproportionate view of their importance, somehow thinking that people couldn’t possibly just not care about what they’re serving up. They are providing luxury items, not essentials: when the budget gets tight, entertainment spending is what gets streamlined or cut.

PaulT (profile) says:

Re: Re:

That’s a rather oversimplified and somewhat wrong view of the situation.

"Internet 2.0 came along, and Netflix went all-digital."

Web 2.0 has bugger all to do with Netflix in reality. You also missed out the facts that Netflix went from being a US-only service to operating in nearly 200 countries and going from a distributor of 3rd party content to being its own TV and movie studio in that time period. If you’re focussing only on pricing and availability of content from legacy corporations, you really have missed the meat of what’s happened.

"And now that’s over, and we’re back to square 1, with a limited set of distributors controlling the content creation"

I’m not sure if it’s deliberate to muddy the truth or if you’re not thinking this through, but – stop conflating distributors and creators, they’re not the same thing at all.

Also, that’s a lie even if you pretend they’re the same – even if you only consider the major studios there’s more than there were before (the major TV and movie studios are essentially the same, but there’s more "mini majors" than there used to be). But, there’s a great many more independent and international players than there used to be.

"the rates are getting too high to justify paying for all of them every month when you’re already paying cable Internet access fees"

Then don’t pay for all of them, only pay for the ones you want to use. If your tastes are so narrow that you have to spend silly money to chase the same 10 shows around the internet, that’s your problem. For me, I’m paying far less than I used to pay and my main problem is that there’s not enough hours in the day to watch everything I want to watch.

"So looking at history, at some point the current contraction of control will get too tight and some third party will come along and disrupt things again"

It will. In the meantime, at least honestly present the history because you have failed to do that here.

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