January 20, 2017 by Paul Dughi
In 2013, just 9% of US residents did not subscribe to pay-TV (cable or satellite) to get television. By the third quarter of 2016, that number had risen to 15%.
That equates to 17 million broadband-only homes, according to TDG (The Diffusion Group) as reported in MediaPost. Park Associates shows the trending: last year, 12% of subscribers downgraded their pay-TV service vs. 6% that upgraded it.
Still, 81% of broadband homes still have some form of pay-TV service.
We have reached critical mass on OTT (over-the-top) services. According to Park Associates, 63% of broadband homes subscribe to at least on OTT service, such as Netflix. Nearly a third of the broadband homes subscribe to multiple OTT services.
Is it slowing?
Nielsen’s latest report shows homes that subscribe to pay-TV (cable or satellite) is down 1.7% from last January. At the same time, the number of TV households actually grew by 1.7%.
Yes, overall TV viewing is increasing.
2016 was supposed to be the year when people cut cable en masse. All sorts of companies launched apps and so-called “skinny bundles” to attract people trying to trim their cable bill. So what happened? The skinny bundles weren’t all-inclusive and they weren’t all that skinny price-wise.
Triple Cord Cutting
First it was cutting landline phones for mobile. Next, cord cutters dropped cable TV and opted for streaming devices. Now, in what Ovum researchers call “triple cord cutting,” we’re seeing people start to trim their broadband connections at home and use cell phones to do their online viewing.
“Cord-cutting started in landlines and gave way to cord-cutting in pay TV in the US. We are now entering the realm of triple cord-cutting.” – Kristin Paulin, Senior Analyst, Ovum research
Most telecommunications companies have been losing fixed phone service for years. A recent survey showed as many as 47% of respondents no longer use landlines in their homes. Cable and satellite companies have been watching subscriber counts decline as people cut the cord. ESPN alone has seen a loss of subscribers topping 7 million subscribers, according to its SEC filings and Nielsen Ratings as reported by Market Realist.
RELATED: Triple Cord Cutting
Major telcos are seeing subscriber losses mount
AT&T and Windstream saw declines in broadband, cable and landlines in third quarter 2016. Frontier lost subscribers in landline and internet. Verizon has lost broadband subscribers in two quarters over the past year and a half.
With cord cutting going on, the thought for cable companies was that what they lost in cable bills would be more than made up by being a broadband provider. Now that may be in jeopardy as well.
“The decline of subscribers in telco core services is by no means a US-only trend. Fixed voice subscribers are declining in multiple countries tracked by Ovum worldwide. Fixed broadband and pay-TV declines are also beginning to make an appearance.” – Kamalini Ganguly, Senior Analyst, Ovum research