A report from PwC suggests that a fifth of Americans could drop their cable subscription in 2016. Meanwhile GfK reports that a third of Americans are thinking of making changes to their pay-television service. A report from eMarketer forecasts that by 2018 a fifth of households in the United States will not subscribe to cable or satellite television. What is really going on? It might be a surprise to many that the top six pay-television services in the United States actually have more television subscribers than they did three years ago.
The PwC report, the third in an annual series, is titled Videoquake 3.0: The Evolution of TV’s Revolution. It is based on an online survey of 1,200 people in the United States.
It found that 79% of respondents subscribe to some form of traditional pay television. Of those, 23% said they had reduced their subscription in the past year, while 16% said they had unsubscribed from pay-TV services.
In 2014, 91% of consumers said they could see themselves subscribing to cable in the following year. In 2015, that figure dropped to 79%, which PwC says implies that more than one fifth of consumers could ditch their cable subscription in the next year.
Is this really likely?
The informitv Multiscreen Index shows that the top ten pay-television operators in the United States that report figures lost 1.26 million television subscribers in the first three quarters of 2015.
Yet that is less than 1.5% of their total base. It is certainly significant, but they would have to lose subscribers at that rate for a decade to lose a fifth of their television subscribers.
Such a scenario is possible, and could even accelerate if Americans really do switch away from pay television. So far, the evidence is that subscriber losses have been slower than some expected.
Over the longer term, many of the leading pay-television companies in the United States have actually been gaining subscribers, mainly through satellite and telco operators gaining at the expense of cable companies.
At the start of 2010, the top six services in the United States reporting figures had 74.34 million television subscribers between them. Approaching the end of 2015 they had 78.18 million. That is a net increase of 5%, or 3.82 million subscribers.
These six services — Comcast, DIRECTV, Dish Network, Time Warner Cable, AT&T and Verizon — collectively serve over 63% of all television homes in America.
A report from market research company GfK suggests that almost a third of all US consumers — over 70 million people — are thinking of making changes to their paid TV service.
GfK categories consumers into groups. ‘Defectors’ are those who have reduced their paid cable or satellite television service or are thinking of doing so. ‘Desirers’ are those who are generally loyal to traditional paid TV or are thinking of adding services.
The ‘defectors’ represent almost 50 million people, or 21% of the population of the United States, while there are about 22 million ‘desirers’, or 9% of the population.
Contrary to popular assumptions, the research suggests that defectors have slightly higher average incomes than desirers and are slightly less likely to have watched online video in the previous month. However, they are less likely to have children in their households and are slightly more likely to be male.
Another forecast, from eMarketer, suggests that a fifth of households in the United States will not subscribe to cable or satellite television by 2018.
It suggests that 4.9 million households in the United States that previously paid for television services but no longer do. It forecasts that number will rise to 5.5 million in 2016 and 7.3 million in 2018. It says the percentage of adults viewing pay television in the United States will fall from 83.6% in 2015 to 79.1% in 2018.
That still implies that three quarters of adults in the United States will be watching traditional pay television by the end of the decade. That does not include those that will be subscribing to other television and video services.
The moral in this is that if you ask American viewers whether they are happy to pay for television an unsurprising number will say that they are considering ‘cutting the cord’.
Yet the evidence is that, one way or another, Americans are paying more than ever for their television and video entertainment and there are no immediate signs of them turning it off and doing something else instead.
Videoquake 3.0: The evolution of TV’s revolution is available from the PWC web site. The Multiscreen Index tracks subscriber trends for 100 service providers worldwide and is available from informitv.
www.pwc.com
emarketer.com
www.gfk.com
multiscreenindex.com