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Why Cable TV is Not Going Away Anytime Soon

Subscribers now stacking on OTT services as they shave the cable cord
NEW YORK(1/17/2017) -

It’s true that in 2017, one in five US adults will not watch traditional pay TV programming.  But that doesn’t mean that cable and satellite TV is dead.  Even with an expected 0.7% decline in pay TV households this year, according to eMarketer’s latest forecast, 98.7 million households will still subscribe to cable, satellite, or telco TV packages.  And that figure will only decline slightly in the next few years.

This year, 1.7 million US adults will cut the cable/satellite cord, as they opt for the convenience of on-demand OTT services instead.  But pay TV is still the dominant medium.  This year, 201.8 million US adults will watch traditional cable and satellite TV, while 175.4 million adults will watch digital video.  And that’s only part of the story.  Time spent with traditional TV in 2017 will drop slightly to 4 hours 1 minutes per day, still far surpassing time spent with digital video, which will reach 1 hour and 12 minutes per day.  Pay TV programming is still luring eyeballs in a big way.

Interestingly, OTT services will add more users this year than pay TV will lose, suggesting that many are simply shaving – but not cutting altogether— the cable and satellite cord, while stacking OTT services like Netflix, Hulu, and Amazon on top.  

“Despite the gains made by OTT services, traditional pay TV remains an attractive option for many consumers, mostly because it still delivers content that’s not readily available on streaming platforms, such as news and live sports,” said eMarketer Senior Analyst Paul Verna. “It’s a complex and shifting environment, and one in which users tend to prefer hybrids of traditional and digital rather than one or the other.”

Another reason pay TV is not going away anytime soon is that ad dollars are still freely flowing toward traditional television.  eMarketer expects TV ad spending to continue to grow through 2020, reaching $72.72 billion this year.  Meantime, digital video ad spending will reach just $12.55 billion in 2017.

“The bottom line is consumers love TV programming, whether it’s delivered via the internet, cable, satellite or antennas,” said Verna. “As long as that remains the case, content owners and distributors will be able to keep monetizing this content through advertising, subscriptions, or some combination of both.”

Methodology

eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.

About eMarketer
Founded in 1996, eMarketer is the first place to look for research about marketing in a digital world.  eMarketer enables thousands of companies worldwide to understand marketing trends, consumer behavior and get the data needed to succeed in the competitive and fast-changing digital economy.  eMarketer’s flagship product, eMarketer PRO, is home to all of eMarketer’s research including; forecasts, analyst reports, aggregated data from 3,000+ sources, interviews with industry leaders, articles, charts and comparative market data. eMarketer’s free daily newsletters span the US, EMEA and APAC and are read by more than 250,000 readers globally.  In 2016 eMarketer, Inc. was acquired by European media giant Axel Springer S.E.

eMarketer
Editorial Contact:
Douglas Clark
(646) 863-8807
dclark@emarketer.com