Things are not looking well for cable TV providers such as Comcast, Charter and Dish, as a recent eMarketer study shows that cord-cutting—quitting traditional pay TV services—is continuing to outpace projections. The number of viewers who will give up their cable television subscriptions is expected to rise by 32.8 percent this year to 33 million, which is about 10 percent higher than July 2017 projections.
The decline in subscribers is happening despite how traditional TV providers are putting aside rivalries and establishing partnerships with OTT rivals such as Netflix, in an effort to retain customers. Both Comcast and Charter Communications—two of the largest cable providers in the US—have integrated services such as Netflix and Hulu into its set-top box offerings. Comcast in particular also includes Netflix, YouTube and Sling TV on its X1 service in the hopes that subscribers will prefer to have everything on one platform instead of having to switch between inputs and figuring out which remote control to use.
“These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn this year,” said eMarketer senior forecasting analyst Christopher Bendtsen. “With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow—but not stop—the losses.”
Conversely, these digital streaming platforms are growing at the expense of traditional television, driven by demand for original programming and multiple services. These services continue to invest heavily in original shows to attract viewers. As a result, eMarketer has increased its viewer growth estimate for YouTube, Netflix, Amazon and Hulu—in spite of Netflix’s subscriber growth underperforming in the last quarter.
According to the report, about 186.7 million adults in the US will watch cable television in 2018, which is 3.8 percent less than last year. Of the major cable operators, satellite providers will suffer the biggest decline due to cord-cutting.
Bendtsen explains, “Consumers increasingly choose services on the strength of the programming they offer, and the platforms are stepping up with billions in spending on premium shows. Another factor driving the acceleration of cord-cutting is the availability of compelling and affordable live TV packages that are delivered via the internet without the need for installation fees or hardware.”
The projected growth of OTT platforms comes in stark contrast to the June study conducted by Parrot Analytics, which found that almost half of US viewers refuse to pay for even a single video streaming service. In comparison, 45 percent of British respondents, 43 percent of Brazilians and 82 percent of Italians said that they were willing to subscribe to one or more digital service.