New Study Says 40% Of American Households Will 'Cut The Cord' By 2030

Cord cutting is a topic which we discuss on a fairly regular basis, particularly over the last several quarters as the subscriber losses for cable companies have seemingly accelerated (see: Cord-Cutting Accelerates, Sends Shock Wave Across Traditional TV).  Not surprisingly, one of the biggest losers of the cord cutting phenomenon has been ESPN, a media giant that ironically was one of the largest, if not the largest, beneficiaries of the cable TV bundle since it made its debut in 1979 (see: ESPN Lost 15,000 Subscribers A Day In October).

Of course, as TDG Research notes this morning, the wave of Americans electing to forego the massively overpriced cable TV bundle is only getting started and will see some 40% of American households ditch their service by 2030.

Generally, TDG expects that the penetration of live multi-channel pay-TV services will decline from 85% of US households in 2017 to 79% in 2030. While statistically a loss of only 7%, it nonetheless illustrates the ongoing secular decline of a once healthy market space. TDG predicts that, by 2030, roughly 30 million US households will live without an MVPD service of any kind, be it virtual or legacy.

 

During this time, legacy MVPDs will experience considerable subscriber losses, due not only to long-term industry trends but also growing competition from virtual pay-TV providers. Consequently, legacy pay-TV penetration will fall from 81% of US households in 2017 to 60% in 2030, down 26%. At the same time, virtual pay-TV penetration will grow from roughly 4% of US households to 14%, up 350% but from a very small base.

 

"TDG said early on that the future of TV was an app. Unfortunately, most incumbent MVPDs weren't taking notes," notes Joel Espelien, TDG Senior Analyst. "The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system."

As the Pew Research Center noted over the summer, while part of the cord cutting story is attributable to the growing availability of quality streaming content, another component is a simple demographic transition with only 30% of millennials aged 18-29 saying they subscribe to cable versus 61% with a streaming subscription.

About six-in-ten of those ages 18 to 29 (61%) say the primary way they watch television now is with streaming services on the internet, compared with 31% who say they mostly watch via a cable or satellite subscription and 5% who mainly watch with a digital antenna, according to a Pew Research Center survey conducted in August. Other age groups are less likely to use internet streaming services and are much more likely to cite cable TV as the primary way they watch television.

 

  • Women are more likely than men to say their primary way of watching TV is via cable subscription (63% vs. 55%).

 

  • Men are more likely than women to say their primary pathway is online streaming (31% vs. 25%).

 

  • Those with a college education or more are more likely than those with less education to say their primary way to watch TV is online streaming. Roughly a third of college-educated Americans (35%) say they mainly watch via streaming, compared with 22% of those who have a high school diploma or less.

 

  • Those in households earning less than $30,000 are more likely than others to say they rely on a digital antenna for TV viewing. Some 14% say this, compared with just 5% who live in households earning $75,000 or more.

Of course, many people wrongfully interpret the death of the cable TV bundle as a precursor the imminent demise of cable companies overall...but, as we pointed out in a post entitled "Streaming Killed The Cable Bundle: Record 941,000 Pay-TV Customers Ditch Cable In Q2," nothing could be further from the truth as the real losers will be the weaker content providers who won't have enough of a draw to sell their content direct to consumers when the channel bundle goes away.  Meanwhile, the cable companies will make out just fine as they will still control the fastest internet connections into the home which will become even more valuable to data-hungry consumers.

We've long held the opinion that the content creation and media distribution businesses are on the precipice of a major transformation.  Since the birth of cable TV, content creators (think Disney, Discovery, Scripps, AMC, etc.) have been locked in a perpetual tug-of-war with distribution companies (Comcast, Charter, Verizon, AT&T, etc.).  Up until now, content creators have been the clear winners as they've continued to force cable companies to carry their growing lineup of channels, many of which are awful, by effectively holding their good content hostage until distributors agree to pay for channels that they (and their customers) likely don't want.  As an example, a company like Scripps may refuse to sign a distribution agreement with Charter for HGTV or the Food Network, unless they also agree to pay for their less popular channels like TVN, Fine Living or the Asian Food Channel.

 

All of which is precisely why cable customers have ended up paying for 1,000 channels when they really only watch about 5 of them.

 

But, that is all changing with the onset of direct-to-customer streaming.  HBO was the first to blink, then came ShowTime and now Disney has just announced that ESPN will also go direct.  What this means, of course, is that increasingly people will be able to make a la carte purchases of the media they actually value and ditch all the 'crap' that clever content creators have forced down our throats for years by holding their desired content hostage.

In summary, just like "Video killed the Radio Star," streaming has just killed the cable bundle.

Comments

BeanusCountus Bilderberg Member Thu, 12/07/2017 - 00:06 Permalink

The predictions are wrong. Want proof? How is everyone here enjoying the flood of ads coming on your viewing of zh, making it impossible to use it as an alt source of info/entertainment? Well, everyone in the ad biz is working on invading the "cord cutter" space in a similar fashion. What exists today in the "cut-cord" space will not be the same in the next few years. It will all be the same. Unless you pay more $ than you do to be in the "on the cord" space. Which no one will ever do. Trust me.

In reply to by Bilderberg Member

Dilluminati BeanusCountus Thu, 12/07/2017 - 08:36 Permalink

after cutting those costs I would reduce content.. not going back.. laughing nopeWhat little live tv we watch is sooo sturated with commercials that the NFL running a walmart add with the field still visible doesn't cut it.. tired of the ad spots.When we retire I'll cut the $6 a month taxes with Ooma.. promise you I will we have that just for workl and stuff reallyThe denial of those who are still sadly paying is sad.. cutting the cord becomes a religion like prepping and not paying interest.. it's a stupidty tax we avoid

In reply to by BeanusCountus

Dilluminati Bilderberg Member Thu, 12/07/2017 - 08:31 Permalink

I did the orange for two months this year, already cancelled 12/30, did a brief HBO stint for GOT, we do OTA and silicon dust to refine things, will never go back.  I though the games on espn which are allot NFC east.. were worth the costs for the two months.. Funny I went to a bar for the one Eagles Dallas game and won the cash bowl drawing..But no I'm done, would never go back

In reply to by Bilderberg Member

Lucretius Wed, 12/06/2017 - 23:09 Permalink

Think of it as taking out the garbage. Yes it is a chore, but it clears useless clutter and makes your home smell better. Ditto for your mind.KILL YOUR TEEVEE, and starve the evil beast in the passing, win win, and bank!Peace, L.

truthalwayswinsout Wed, 12/06/2017 - 23:21 Permalink

Learn how to use a VPN and keep only your online access.We saved from $60-$80 per month and have not paid to watch anything for the past 6 years.We took the money and used it to buy all the food we eat on a regular basis when it was on deep discount sale.We are working on completing our second year supply of food, have purchased weapons and ammo for self-defense and learning how to raise our own food. We have equipment as well to cover our water and survival needs. Soon we will be working on portable solar and wind so we will have power in an emergency and then cutting off our power to the grid.We figured long ago that it was not worth paying money to the people who want us dead and who hate us with a passion.It is your patriotic duty to never pay Hollywood ever again and also the likes of Google, Facebook, Twitter, and Amazon.

Dilluminati haruspicio Thu, 12/07/2017 - 08:25 Permalink

You need to stop being such a stupid cunt.  Look at fucking bill idiot, you're paying probably $10.00 a month for a stupid modem rental.https://www.amazon.com/gp/offer-listing/B016PE1X5K/ref=dp_olp_all_mbc?i… will pay for itself in less than one year.  Add Ooma again it will pay for itself in less than three months.If you do both and had VOIP you will save close to $500 a year just there alone, do that for 5 years, but don't stop there.. cut the TV also damn now your saving some real money it's now 1,200 a year do that for 5 yearsNow your looking at $7,000.00 It is ridiculous fucks who can't do a budget.. but it gets better get 2% cash back and consolidate all your debt and pay in full and you get what you do.. I get about $500 per year from thatSo now your at some serious fucking money, and yeah you invest money to save money.. and then you bulk buy staples and store them, shit you know you will eat, will consume, you see coffee cheap, you pull out the credit card and buy and prepI'm not giving my after tax earnings to some fuck because I can't do a budget and examine costsThere is nothing about the paranoid comment that is even funny.. dude when the power goes out in a storm I turn my generator ON!  Cunt!

In reply to by haruspicio

Dilluminati truthalwayswinsout Thu, 12/07/2017 - 08:12 Permalink

Between what I cut back on services and what I get cash back I use a prep fund, I have been doing it for close to 7 years now and I have saved enough to not only prep me but the family members as well, I even occasionally stack some silver also.  I pay what little bills I have with credit card and then use that cash back to invest into other no fee options and services.

In reply to by truthalwayswinsout