Netflix, Hulu, Amazon Prime, Roku, and a host of alternatives to traditional cable subscriptions have evolved in recent years. These services allow customers a new freedom in the way they watch TV, something cable companies lack-- the ability to watch what they want, when they want, at a cheaper rate.
In the second fiscal quarter of this year, cable TV companies lost an incredible 566,000 customers. This is a 75% jump from last year’s second quarter losses, which totalled 321,000. Last year, the number of households that left a cable subscription was 0.1% of those that kept subscriptions. Since then, the number has increased to 0.7%.
The number of Americans with cable subscriptions has been dropping for years now but is beginning to advance more rapidly. Some argue that the decline is not actually the result of people dropping their cable subscriptions but a size increase in a group that has no intentions of getting a cable subscription: Millennials. According to Mark Rogowski in an article for Forbes Magazine:
“What is happening is that an entire generation is growing up with internet video and — in many cases — not a lot of disposable income. People used to move out of their parents’ homes, get jobs, and reflexively sign up for cable. Now — for those that actually get to move out — the notion of spending the money on cable is a harder sell, especially after the introductory period when the bill tends to rise from $30/month or so to a multiple of that.”
Once again, the millennials come into play. This generation is staying away from cable and using Netflix and Hulu to watch TV. As millennials take over more and more households, cable companies will see the trend exacerbated. However, in an attempt to stay relevant, many media groups are making their own streaming services. HBO is launching a streaming service that doesn’t require a cable subscription.CBS, Showtime, and Nickelodeon are following suit.
Further reading:
ESPN is starting to feel the impacts, proving that they’re not an invincible media titan: https://www.techdirt.com/articles/20150810/05283931891/wall-street-suddenly-wakes-up-to-cord-cutting.shtml
PC Mag’s Guide to Cord Cutting: http://www.pcmag.com/article2/0,2817,2478213,00.asp
Is Cord Cutting Really Just a Myth?: http://fortune.com/2015/07/22/why-cord-cutting-is-a-myth/
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