Cord-Cutting Accelerates, Sends Shock Wave Across Traditional TV

By Stock Board Asset

According to eMarketer, digital video consumption is on the rise leading to a seismic shift in the industry. Traditional TV viewers are expected to shrink nearly 10% by 2021 with the expectation of a sharp decrease of total media ad spending upwards of -30% reduction. Even in 2017, the trend is accelerating with eMarketer expecting a slowdown in ad spending, after 2016 benefited from the Olympics and U.S. presidential election.

As eMarketer explains, traditional TV advertising is slowing even more than expected as viewers cut cable and transition to digital video platforms. The estimates for ‘cord-cutters’ is expected to explode this year through 2021. The timeframe provided could explain cable-apocalypse is here. Per eMarketer,

In fact, by 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV (“cord-nevers”).

 

This year, there will be 22.2 million cord-cutters ages 18 and older, a figure up 33.2% over 2016. The overall tally is much higher than the 15.4 million eMarketer previously predicted. Meanwhile, the number of US adult cord-nevers will grow 5.8% this year to 34.4 million.

“Younger audiences continue to switch to either exclusively watching Over-The-Top video or watching them in combination with free TV options,” said Chris Bendtsen, senior forecasting analyst at eMarketer. “Last year, even the Olympics and presidential elections could not prevent younger audiences from abandoning pay TV.”

The hemorrhaging of traditional TV viewers will only accelerate. Overall, there are 196.3 million Americans that watch traditional TV, down 2.4% over 2016. By 2021, Emarketer thinks the total will fall nearly 10% compared to five years earlier. TV views over the age of 55 will continue to watch conventional TV, because that is tradition in their generation. The cord-cutting revolution is mainly impacting younger generations, as the old system is dismantled and the new system is ushered in.

Who are these disrupting digital streaming video services?

Back in August, WPP, the world’s largest advertising company cut full-year revenue forecasts and offered “terrible guidance”, which sent shares lower -13%.  Goldman Sachs reports:

  • Results confirm weak trends seen across advertising companies/TV, with ad spending cuts in fast-moving consumer goods being the common driver
  • Key question whether pick-up in organic growth from 2H is credible
  • Goldman sees new organic growth guidance as “achievable,” based on comments by several consumer goods companies on higher ad spending in 2H, easier comparables, recent improvement in WPP’s new business performance

Paul Verna, a principle analyst at eMarketer listed several factors in the acceleration of cord-cutting trend:

  • First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s Sling TV.
  • Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription.
  • Third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”

Average time spent per day with video by US Adults, by device, 2015-2017

While the end of legacy cable may not be here, it is approaching. America is currently in a transitional period and is increasingly gravitating to the cheapest possible option away from cable, and unless cable providers drastically change their cost structure and pivot their business models, the revolution in America's viewership habits will be televized for all to see.

Comments

nope-1004 stant Wed, 09/13/2017 - 19:09 Permalink

Part of the problem is that TV is no longer informative.  It has become a venue for the anchors' personal opinion or that of the billionaires that own 80% of content, who tell you what you should think.  In addition, the sponsors of House Flipping shows (for example) are banks, so there is a direct social impact that they are trying to convey and get you further into a slavery position as a citizen.If you have a brain, you find out very quickly how disgusting traditional TV really is.  This is welcome news because that means people are sick of watching and listening to someone trying to persuade or dissuade, instead of delivering a trusted message. 

In reply to by stant

Blue Steel 309 nope-1004 Wed, 09/13/2017 - 19:30 Permalink

It never was. Even those "educational documentaries" were loaded with psychological programming and utter wastes of time compared to the knowledge inside a library or now online.

If you want to be mind controlled by the Jewish elite, go ahead and watch TV/movies. Tin foil you say? Why do corporations and governments spend trillions of dollars on advertising and propaganda? Was that part of the informative TV you reminisce about, nope-1004? How about the CIA's involvement with Hollywood?

The old people were right, but we were too young/stupid to listen. TV rots your brain.

In reply to by nope-1004

Cheka_Mate pods Wed, 09/13/2017 - 22:33 Permalink

The Internet is to the MSM what the Guttenberg Bible / Printing Press was to the Catholic ChurchHeterodoxy vs Papal Bull It's only a matter of time before the National Felons League stops running at a profit Middle America is tired of paying for "White Guilt" indulgences

In reply to by pods

Buck Johnson nope-1004 Thu, 09/14/2017 - 08:49 Permalink

Cable TV is dying and the owners of these platforms just dont'get it.  Back in 1998, I said that Time-Warner (who owns comcast) should have set up a system where people could be able to access their massive library of shows and series and movies via cable and online and have users watch shows whenever they want (like Netflix or prime or the many other platforms now) but they didn't.  Now they are competing with all them and losing and they have th ability to stop this by changing their whole idea of television 180. Can you imagine if Comcast set up where you pay 200 dollars a year where you get your local channels and everything over channel 13 essentially you can access just by looking for the show or network via a list.  You wil l have access to full series and all the movies (old and new) from time warner.  You can watch shows that where local and shown but are in the database for you to watch and/or DVR.  Then Time Warner has it where you can add or they put on their platforms all the apps from Amazon prime to Netflix to whatever that you are subscribed too and you can watch it via their platform.  You don't have to worry if your television can add the app or not you will have a system that will have th capability to add those apps and all you do is watch them if you paid for them.Turn Comcast into a waystation for all of their shows and movies that can be seen on demand and at anytime with one fee for the year and then the rest of the speciality apps that are out there. 

In reply to by nope-1004

BarkingCat Rapunzal Thu, 09/14/2017 - 00:47 Permalink

I am in the demographic thay should have had cable for all my working life but I never did.If it was not on broadcast tv, I did not see it.I cut the phone landline about 15 years ago. All I ever got on it was telemarketers. Then I did have Comcast run a cable into my house but only for broadband Internet. About a year ago I dumped the Comcast broadband. Now I rely on T-Mobile for all my communication needs - phone and internet.Most of the time I get better speeds with their LTE service than Comcast's cable. While I would like to think that I am a tech rebel and a pioneer, the truth is, I am simply cheap...hmmm frugal. 

In reply to by Rapunzal

Anonymous_Bene… TruxtonSpangler Wed, 09/13/2017 - 21:33 Permalink

Well speaking for myself, Trux, I got rid of the "smart" phone and went back to the flipper about 6 months ago.I found that, despite my earlier fears, I have yet to encounter a single situation where I wanted the smartphone back. As long as I can get ahold with someone with an internet connection then I know I'm good!Mostly I just need something for emergencies when I travel, in case the truck breaks down somewhere far from home. So yeah, mostly I quit carrying a phone at all. It mainly sits forgotten out in the shop or in my truck. It only needs charged for a short time every 4 or 5 days and sometimes I forget about it until it's been dead for a day or two. Sure, the wife bitches that she can't get ahold of me when she really "needs" to...but hey, that's not always a bad thing for me ;)

In reply to by TruxtonSpangler

ET (not verified) Wed, 09/13/2017 - 18:57 Permalink

The masses are waking up.

Most people that I know watch streaming content so this is no surprise.

Most television programming is a waste of time, though.

Madison's_Ghost yogibear Wed, 09/13/2017 - 19:23 Permalink

The cable companies have spent 30+ years lobbying the FCC to hold off from having to provide per-channel a-la-cart tv service.  In the meantime people got tired of waiting for they day they only had to pay for what they wanted.  All the while internet based entertainment was getting more plentiful and mostly free. Cable is dead.  They just dont know it yet.

In reply to by yogibear

WillyGroper Bigly Wed, 09/13/2017 - 19:38 Permalink

SNET?folks are grandfathered until they wreck the PSN in 2020.what they're trying to do is dangle a $10 carrot to irradiate you by slapping an antenna on your home.no PSN on copper.  VOIP available on copper, but you'll prolly have to bundle w/BB.i'm assuming that 2020 deadline coincides w/5G rollout completion, of which i won't partake.they've sold off many exchanges in rural areas to smaller phone companies to bail on the maintenance of copper. 

In reply to by Bigly

SantaClaws Bigly Wed, 09/13/2017 - 19:42 Permalink

My understanding is that here in New England, in those areas in which Verizon has not installed FIOS (fiber optic), copper telephone lines are still active.  I was surprised to learn DSL is still used where FIOS hasn't been installed.Many choose to switch their phones from copper to alternative cable providers, though (Comcast, Cox, etc.).

In reply to by Bigly

Utopia Planitia SantaClaws Wed, 09/13/2017 - 21:16 Permalink

Fiber is available at a very small fraction of doorsteps in the USA.  The cost to install it is astronoical.  Fiber is gradually gaining share but it will probably be 100+ yrs befoe "everybody has it".  Out here on the West Coast (and this is not what you would expect) almost nobody has access to fiber. It's great stuff but when copper is already available you are going to use what you got.  DSL speeds have ramped up over the years and it is doubtful you would notice any improvement going to fiber (unless you are somebody moving GB of files).  I can watch streaming video nonstop on my 2 MB DSL connection and I never get buffering.  Does not make a case to install fiber.  (until every subscriber is willing to pay $1,000+/month for the expense of putting it in).

In reply to by SantaClaws

Row Well Number 41 ET (not verified) Wed, 09/13/2017 - 19:21 Permalink

So you think Netflix will still have a 2.36% profit margin when the content providers start running their own streaming services, because they are.  Netflix's own content has yet to be profitable for them.  In addition to that, when the fiscal clusterfuck finally arrives, will they be able to survive the lack of equity income.  These are just a few of the things that can throw a wrench in these projections.

In reply to by ET (not verified)