Cable and satellite TV companies scramble as 22 million Americans set to cancel subscriptions in 2018


The long-forecasted doomsday of traditional pay-TV services looms ever closer, as cable companies watch in horror while subscriptions drop like flies.

The shift from traditional to streaming services is expected, ultimately, but is taking place faster than previously anticipated, as noted by marketing research firm eMarketer.

In 2017, 22.2 million Americans are expected to cut the cord on cable, satellite or Telco services, up 33 percent from 2016 projections. The number previously predicted by eMarketer was 15.4 million. Meanwhile, the number of millennials purchasing homes and never embarking on a cable adventure at all is growing, as well. The number of “cord-nevers” is projected to rise 5.8 percent 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 [the U.S.] presidential election could not prevent younger audiences from abandoning pay TV.”

Cable companies will live for the time-being, however, still possessing a robust market of 196.3 million US adults with pay TV. But the industry is unquestionably dying and executives are scrambling to adapt. That number is expected to drop to 181.1 million in 2021, and the only age cohort expected to increase viewing is the 55 and older segment.

There is one potentially industry-saving caveat: eMarketer’s bleak numbers do not include online TV viewing services such as such as Dish Network’s Sling TV, AT&T’s DirecTV Now, Hulu’s live TV service, or YouTube TV. But industry analysts say over-the-top TV subscription services, so far, have not offset declines in traditional TV viewing, and executives will need to work hard to change that.

It would simply be incompetent for cable and satellite providers not to see this coming, and most companies have launched streaming services to begin to capitalize on the viewing shift.

The biggest concern, of course, is the shift in ad revenue. Average daily time spent watching TV (excluding digital) among American adults will drop 3.1%, to 3 hours 58 minutes this year. Digital-video consumption, meanwhile, continues to climb. U.S. adults will consume 1 hour 17 minutes of digital video per day on average in 2017. Thus, advertising is set to increase just 0.5 percent to $71.65 billion. As a result, the TV sector’s share of total U.S. media ad spending will drop to 34.9% (vs. 36.6% in 2016) and is expected to fall below 30% by 2021.

But that doesn’t mean advertisers don’t need somewhere to advertise. Therefore, it will be the tall task of traditional TV executives to step out of their long-enjoyed monopolies on mainstream media and figure out where that ad revenue is going.

Dennis Michael Lynch, CEO of DML News, weighed in on the matter. “Two days ago we cancelled our business subscription at our old studio.  The cable company called me the next day offering money for me to stay with them.  I tried to explain we were leaving the location, but they were tone deaf.  The guy kept offering me things for free.  I hung up releasing what the cable companies know what we all know, but they are in total denial.  Sooner of later they’ll hit the stage of acceptance.”

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