For more than a decade, cable TV executives brushed aside the threat of cable TV “cord cutting” as either a nonexistent threat or a temporary phenomenon. Of course neither wound up being true, and consumer defections from the bloated, pricey traditional cable TV bundle continue to set records during the COVID crisis. Traditional cable TV providers saw a 6.2% drop in subscribers in the third quarter of 2021, an all time record. It’s particularly bad for traditional satellite TV providers, who saw a 12% dip in overall users during the same quarter.
But it’s not just traditional cable that’s feeling the pinch. Growth in new streaming alternatives is also slowing down:
Growth slowed for virtual multichannel video programming distributors (MVPDs) in the third quarter of 2021, as the category added just under 1 million subscribers compared to 1.7 million new subscribers a year ago…Including the modest gains for the vMVPDs, total pay TV distribution was down 5.2% in the third quarter, the biggest drop since the 5.5% decline in the second quarter of 2020…”
While streaming alternatives are still doing well, and still pulling subscribers away from traditional cable TV, the slowdown has many causes. One being that traditional streaming increasingly mirrors the habits of the broader TV sector, with broadcasters driving a consistent drum beat of consumer price hikes without expanding service offerings or increasing value to the end user:
“Six years ago, everyone burst out of the gate with eye-popping low prices,” MoffettNathanson said in a report Tuesday (January 5). “That helped them get out of the gate, but it undermined their longer-term prospects in two ways.”
The first issue was that the vMVPDs attracted price-sensitive consumers. The second issue is that the vMVPDs would have to their raise prices faster than traditional distributors as content companies increased their license fees.
The other driving factor is that younger generations just don’t watch as much television overall, with time traditionally spent binge watching TV series instead going toward binge watching YouTube and TikTok. That’s not to say that more traditional isn’t popular. Newer streaming TV providers now have 14.2 million subscribers, and traditional TV is expected to still lay claim to 72.7 million subscribers by 2023, albeit down from 100.5 million subscribers one decade earlier. Techdirt