With cord cutting seeing an all-time high in 2020, more than 6 million households will cancel their pay TV subscriptions this year, according to data from eMarketer. While the global Coronavirus pandemic has accelerated media consumption around the world, traditional pay TV has actually seen a decline in subs who ditch their cable plan for a more streamlined and cost-efficient experience with streaming services.
eMarketer also attributes this high cord-cutting number to the lack of live sports airing this year, saying that many people rely on cable subscriptions to watch their favorite teams. Having ports off the air for the first half of the year led to many viewers cancelling their pay TV plans, and not re-subscribing once sports returned to the scene.
“Consumers are choosing to cut the cord because of high prices, especially compared with streaming alternatives,” said eMarketer forecasting analyst at Insider Intelligence Eric Haggstrom. “The loss of live sports in H1 2020 contributed to further declines. While sports have returned, people will not return to their old cable or satellite plans.”
By the end of this year, a total of 31.2 million US households will have cut the cord. And by 2024, more than one-third of US households will have dropped pay-TV all together.
“As pay TV subscriber losses accumulate, cable providers have been focusing on their internet services, which are more profitable and have benefited from the consumer shift to streaming video,” Haggstrom said.
This dwindling viewership has taken a toll on TV advertisement spending as well. The total spend will drop 15.0% this year to $60.00 billion, the lowest the industry has seen since 2011. Analysts predict the spending won’t recover to pre-pandemic numbers for at least another four years.
“While TV ad spending will rebound in 2021 with the broader economy, it will never return to pre-pandemic levels,” Haggstrom said. “Given trends in cord-cutting, audience erosion, and growth in streaming video, more ad dollars will shift from TV to digital video in the future.”
More than 77 million US households are now without cable, satellite, or telecom TV packages. That’s a 7.5% drop from last year – the biggest decline to date.
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