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Will cable TV go the way of landlines globally?

People have been predicting the death of cable TV for a long time, but this really might be it. As recently as a decade ago, nearly all Americans — more than 85 percent of U.S. households — paid for packages of TV channels from cable or satellite companies. That started to decline haltingly at first and then far more quickly in the past few years.

Now, the share of American homes that pay for conventional TV service is closing in on 50 percent, according to recent assessments from the investment analyst Craig Moffett and S&P Global Market Intelligence’s Kagan research group.

For comparison, cellphones were around for decades before the percentage of Americans who didn’t have a landline telephone at home reached 50 percent, around 2017. (In the most recent government figures, about one-third of American adults have a landline.)

Maybe it seems inevitable and predictable that cable TV would go the way of the landline. I promise you that it was not necessarily obvious, even once Netflix started to take off. Old habits die hard. Old industries that make a lot of people rich die even harder.

And don’t forget that some new technology habits catch on fast but don’t stick. Remember Myspace? Or predictions that electric scooters or Segways would become go-to forms of transportation for urbanites? What may be a terminal decline of America’s cable TV industrial complex is a big deal. It shows that technology can change entrenched ways of doing things slowly, and then suddenly, with profound ripple effects.

Ian Olgeirson, a research director at Kagan who has been following America’s TV market for about 20 years, told me that he was caught off guard by how quickly the monthly cable bill went from being standard to obsolete for many Americans. (Protocol had more on this in a recent newsletter.)

Olgeirson and other TV experts I’ve been speaking to didn’t single out one tipping point in cable TV’s big shrink. They said the downward trend was more like a series of creeping changes that piled up.

Netflix offered us sofa sitters a happy alternative to paying for 500 TV channels that we mostly didn’t watch. In the TV industry, there was also a slow realisation that clinging to the old ways might be fatal. Cable TV companies stopped fighting so hard to keep people from defecting and were happy to instead sell you zippy internet service for streaming binges.

Once the cable TV edifice started to crumble, entertainment companies like Disney decided that they couldn’t go-all out to prop up the system that had sustained them for decades. They’d prefer to become their own Netflix. Old TV still has some life left. For now, Americans spend a majority of their TV time watching conventional television rather than streaming video. Streaming is also a tough business. And including the quasi-cable-TV services from online companies like YouTube and Hulu, about two-thirds of U.S. households pay for some old-school TV channels. An optimist would say that it’s stunning that cable TV has stayed this resilient.

But it’s clear that the cable TV system that for decades brought joy and headaches to tens of millions of Americans is petering out. The wild card, as Moffett, the investment analyst, wrote in a private report to his clients this week, is whether Americans keep turning away from cable and satellite TV relatively slowly, or whether it will “abruptly collapse, like a Jenga tower.” DT Next

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