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Cord-Cutting Soars as Streaming Services Improve Quality
Even though pay-TV providers are forming partnerships with over-the-top (OTT) services, such as Netflix, in an attempt to retain customers, the Cord-Cutting Soars tendency is still on the rise, according to a new study from eMarketer.
A recent study from eMarketer, the most widely cited research providers in the media, states that TV cord-cutting will reach an estimated 32.8% in 2018. The firm projects that the total number of cord-cutters will jump to 33 million by the end of this year in the US.
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This raise would take the total expected of those who cancel their paid TV subscription with a cable, satellite, or telecommunications company from 24.9 million users in 2017 up to 33 million by the end of 2018.
“Most of the major traditional TV providers, such as Charter, Comcast, Dish, etc., now have some way to integrate with Netflix,” said Christopher Bendtsen, eMarketer senior analyst. “These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn this year. With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow the losses.”
As the traditional pay-TV universe collapses, the number of viewers accessing over-the-top video services keeps growing. About 147.5 million Americans watch Netflix at least once per month. That’s followed by Amazon Prime Video (88.7 million), HBO Now (17.1 million), and Dish’s Sling TV (6.8 million).
“The main factor fueling the growth of on-demand streaming platforms is their original content,” stated Paul Verna, principal analyst from eMarketer. “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.”
Netflix is now dominating the field of original programming. By the end of the year, it will have spent about $8 billion on content. This significant investment attempts to reach more than 1,000 original shows and movies on its platform.
Netflix’s spending is also paying dividends. They broke a 17-year streak from HBO this year to earn the most Emmy nominations of any network. Just five years after the company secured its first nominations in 2013.
Another key factor driving away pay-TV customers continues to be the price. The average pay-TV bill in 2017 equaled $100.98 per month.
That’s an opportunity lower-cost “virtual” pay-TV players have to take. It is estimated that virtual multichannel services will hit nearly $2.82 billion in overall revenue in 2018. This numbers will lead it to more than $7.77 billion by 2022. Among OTT TV services, average revenue per subscriber is roughly one-third of traditional cable TV. Nevertheless, experts expect virtual pay-TV services to increase average monthly income to $37 in 2018 for a 19% year-over-year increase.
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