Cord Cutting Is Accelerating Faster Than Expected, Research Firm Says


Looks like the video streaming services that initially scoffed at the suggestion that they’d cannibalize traditional pay TV were wrong.

Research firm eMarketer today cut its forecast for 2017 U.S. TV ad spending by 1.5% to $71.65 billion — a mere 0.5% increase over 2016 — saying that cord cutting is accelerating faster than it expected.

It sees 22.2 million adults this year having cut the cord with traditional pay TV  — a 33.2% increase from 2016. It originally anticipated 15.4 million cord cutters.

On top of that, there are 34.4 million adults who have never subscribed to pay TV, a 5.8% increase from last year.

The bottom line: About 196.3 million adults will be traditional pay TV viewers this year, down 2.4%, the firm forecasts. And by 2021 the number will be down 10%.

eMarketer principal analyst Paul Verna says that many people prefer the online alternatives.

“First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s SlingTV,” he says. “Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription. And third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”

Viewing of digital video will rise 9.3% this year to 1 hour and 17 minutes, eMarketer predicts.

Some of that time will come from conventional television. This year average viewing time for conventional TV will for the first time fall below 4 hours a day, the firm says. It expects 3 hours and 58 minutes, down 3.1%.

Yesterday AT&T CEO Randall Stephenson — whose company owns DirecTV — told an investor gathering that the high cost of traditional pay TV explains why it has “been losing subscribers pretty steadily over the last few quarters.”

Those opting out, he added, “tend to be younger, they tend to be lower-income, and they tend to be millennial and which means they tend to live in apartment complexes.”

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