The demise of cable TV has been written about for several years now and while most predictions about what will kill it have come to fruition, cable continues to hang on. So maybe the demise is inevitable, because it seems like the cards are stacked against it, but perhaps the death will be slower than forecasters predict, and that slower time horizon can give cable companies enough time to adapt to the changing landscape and find a way to compete. In this article we discuss the top reasons why cable is faced with these issues.
A Slow Death
Beginning in 2013, cable TV started experiencing a loss of subscribers, and that loss grew wider in 2014. A combination of lower TV viewership because of fewer cable subscribers and other media supplanting cable has the industry at a crossroads. In fact, according to Nielsen ratings, TV viewing has been dropping about 10% per quarter. There are several reasons for this dilemma.
- New competitors have emerged, challenging the legacy systems. Netflix, Inc. (NFLX), Amazon.com, Inc. (AMZN), Sling TV, Crackle, and Sony Corporation (SNE) provide streaming content, replacing the set-top box/TV combination as the only way to view entertainment. According to Netflix, one in two households in the US and Canada has a Netflix subscription, bringing the total subscribers to more than 67 million in North America and over 100 million worldwide, accounting for approximately 12 billion hours of content streamed in 2019.
- Consumers are no longer willing to pay for a plethora of channels that they don’t watch. This antiquated cable model has become usurped by streaming options of getting only what you want to watch, and even those consumers that are still with cable are requesting more targeted, smaller bundles.
- Media companies that own the most sought after content, like ESPN or HBO, have recognized the change in consumer behavior and begun experimenting with offering their own streaming content. While many smaller networks may not have the interest and following that these larger ones do, they are also figuring out ways to get their content into a streaming format, through partnerships. According to BTIG Research, “We won’t see many channels beyond HBO who have the clout and audience to go it alone. But the market will increasingly splinter into skinny bundles available to anyone with an Internet connection. We expect many more to come, targeting different groups and demos, each with a unique way of packaging its networks.”
- The costs of the legacy bundled cable subscriptions had grown so high that consumers are no longer willing to pay and are forgoing cable services all together. Between 1995 and 2005 cable bills increased three times faster than inflation, a highly unsustainable trend.
- Americans are more wired today and prefer the ease and convenience of transitioning between devices like laptops, mobile phones, and wearable (watches) that broadband and wireless connections afford. The data backs up this transition. According to Nielsen, between 2014 and 2018, the percentage of broadband-only households has more than tripled.
The Bottom Line
Minutes spent per month on Internet videos on computers and time-shifted TV increased between 2013 and 2014 while traditional TV was the only medium that lost minutes. Whether it’s the convenience, the lower cost or the more desirable content, a shift in our viewing habits has been changing the way the industry operates. Now the question is will the legacy players be able to adapt before they are pushed out?
FAQs
Consumers are no longer willing to pay for a plethora of channels that they don't watch. This antiquated cable model has become usurped by streaming options of getting only what you want to watch, and even those consumers that are still with cable are requesting more targeted, smaller bundles.
Why is the cable industry dying? ›
Consumers are no longer willing to pay for a plethora of channels that they don't watch. This antiquated cable model has become usurped by streaming options of getting only what you want to watch, and even those consumers that are still with cable are requesting more targeted, smaller bundles.
Is cable TV on a decline? ›
The decline in viewing on most cable networks continued in 2023. The falloff comes from the prevalence of cord cutting coupled with premium content and subsequently viewers leaving cable television for streaming platforms.
Why are people getting rid of cable? ›
With the rise of faster Internet speeds, more and more people are finding a new sense of independence by dropping their satellite/cable providers. It is the biggest trend sweeping the country and for a good reason. The cost of cable has steadily risen over the years, pushing more and more people to 'cut the cord. '
Is cable TV going to disappear? ›
Now, about five million people abandon cable TV every year — leaving about 75 million Americans in the traditional TV ecosystem, according to analyst estimates. Most analysts believe that 40 million to 60 million Americans will continue to subscribe to some form of traditional cable in the years to come.
Why is local TV news dying? ›
A lot of it is the online migration of advertising. But what it means for you is fewer reliable sources to tell you what's going on and why. Americans in “news deserts” tend to rely on social media to get the latest on their communities and beyond.
How much longer will cable last? ›
Obviously, cable television isn't going to die overnight. In fact, it's very likely to linger for a long while, perhaps decades. But increasingly, it will be much like the way AOL still has dial-up subscribers.
When did cable TV lose popularity? ›
According to reports released by the Federal Communications Commission, traditional cable television subscriptions in the US peaked around the year 2000, at 68.5 million total subscriptions. Since then, cable subscriptions have been in slow decline, dropping to 54.4 million subscribers by December 2013.
Why have we lost TV channels? ›
Missing channels are typically caused by antenna or set up faults. Please check that you've got your antenna cable connected properly to your TV, set top box or PVR.
Who uses cable TV anymore? ›
Over the last year (Q2 '22 to Q2 '23) the traditional cable TV sector lost a whopping 5,360,000 customers, compared to 4,235,000 customer defections the year earlier. The current number of U.S. households that has a cable connection sits somewhere around 46 percent, down from 73% at the end of 2017.
So, if you're wondering if traditional cable TV is going to make a comeback this 2024, the answer would be a big fat no. Here are several reasons why we think traditional cable TV will continue to go down the drain. Cable TV cannot provide the convenience streaming services offer.
What are the disadvantages of cable TV? ›
Cons of Cable TV
Cable TV availability may be limited to areas with cable infrastructure, making it less accessible in remote locations. It may have fewer channels compared to satellite TV and can be more expensive due to equipment rental fees and additional charges.
Will cable companies survive? ›
Wolk points out that there will still be a 30-40% part of the older population who will hold on to their cable subscription. This means that despite the incoming change, the TV industry will remain profitable. It just won't make quite as much money as it did in the previous two decades.
Are cable companies losing business? ›
The public pay TV operators (cable, telco, satellite) that we track reported a weighted average 9.6 percent drop year-on-year in subscribers, and the media network groups' affiliate fee revenues were down 2.5 percent,” Nollen said in an Aug.
Is cable going to make a comeback? ›
So, if you're wondering if traditional cable TV is going to make a comeback this 2024, the answer would be a big fat no. Here are several reasons why we think traditional cable TV will continue to go down the drain. Cable TV cannot provide the convenience streaming services offer.
Does anyone use cable anymore? ›
All that being said, there is no doubt that cable television is losing its appeal. The number of U.S. households that subscribe to cable TV went from around 47% in 2019 to 42% in 2022.
