It has long been settled that streaming services will dominate the entertainment landscape. The only question has been the length of time it will take for consumers to completely cut out traditional pay-TV providers. Well, a new report from eMarketer suggests that time may come sooner than expected.
According to the firm’s latest figures, the number of cord-cutters— which eMarketer defines as adults that have canceled a pay-TV service and continued on without it—will climb 32.8 percent this year to 33.0 million. That’s higher than the 22.0 percent growth rate (27.1 million) projected in July 2017.
Overall, 186.7 million US adults will watch pay TV (cable, satellite or telco) in 2018, down 3.8% over last year. That’s slightly higher than the 3.4% dip in 2017. Satellite providers will have the biggest decline, followed by telco. In an effort to stay relevant, traditional pay-TV providers have attempted to integrate OTT services like Netflix into their service, hoping the ease of switching between the two services will entice customers to stay.
“Most of the major traditional TV providers [Charter, Comcast, Dish, etc.] now have some way to integrate with Netflix,” eMarketer senior forecasting analyst Christopher Bendtsen said. “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—but not stop—the losses.”
According to eMarketer principal analyst Paul Verna, the main reason for the growing popularity of SVOD services is the original content.
“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,” Verna explains. “Another factor driving the acceleration of cord-cutting is the availability of compelling and affordable live TV packages that are delivered via the internet without the need for installation fees or hardware.”