Surprise: It's the Pay TV Companies That Are Driving Cord-Cutting
Cord-cutting continues to accelerate, as more homes say no to pay TV and yes to lower-priced streaming options. The researchers at eMarketer report say that the rate of U.S. households cutting the cord increased by 19.2% this year. Next year 19.9% of homes will be cord-cutters. By 2023 there will 72.7 million pay TV households in the U.S. and 56.1 million that don't subscribe to pay TV, eMarketer forecasts. If the current rate of cord-cutting holds, the number of homes with and without pay TV will be equal a few years after that.
Curiously, the wave of cord-cutting seems to be driven by the pay TV companies, themselves. As eMarketer forecasting analyst Eric Haggstrom points out. cable, satellite, and telco operators are raising prices across the board, which is causing bargain-hunters to drop their pay TV service. The operators would rather lose these customers than maintain unprofitable deals. But when these customers drop out of their low-priced bundles and keep their broadband, they're forced to keep a service with a high price and high profit margin.
"This has been a boon for TV providers," Haggstrom writes.
eMarketer sees traditional TV viewing declining by 3% this year to an average of 3 hours 40 minutes daily. With fewer viewers watching less TV overall, networks will be forced to raise the price of ads, Haggstrom notes.
Don't count the pay TV market out too soon, because it's still growing. ABI Research forecasts the industry will count over 1.1 billion subscribers by 2024.
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