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Some 12 years ago, the content and communication head of a major tv broadcaster in India had declared very confidently, even dismissively while holding up his hand with thumb and forefinger two inches apart, that he found it incredible that “a screen so small!” could ever take any significant number of audi ences from a screen –now flinging his arms full wide apart – this big!
Well, he wasn’t the only one; in fact, his entire tribe of doubters has been proven incorrect as the number of cord-cutters from traditional TV viewing has been growing and out stripping the cord cutting projections each year. We’ve seen that in the rising number of FIFA and other sports viewing growing on OTT platforms at a small but groing expense to traditional TV viewing in India, and now, the latest numbers from eMarketer Live tell us that in the US, even as traditional pay TV providers form partnerships with former over-the-top (OTT) rivals to retain customers, cord-cutting continues to outpace projections.
Satellite providers will have the biggest decline, followed by telco in the US, where 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
eMarketer’s latest figures project that the number of cord-cutters —adults who have ever cancelled pay TV service and continue without it — will climb 32.8% this year to 33 million. That’s higher than the 22.0% growth rate (27.1 million) projected in July 2017.
Satellite providers will have the biggest decline, followed by telco in the US, where 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.
In this context, it is interesting to note that most traditional TV providers have realized the dangers to their subscriber databases from OTT platforms like Netflix, Hulu, Hotstar and Amazon Prime.
Traditional TV providers like Charter, Comcast, Dish, have integrated to varying extents with Netflix, and in India TATA Sky too recently announced a strategic partnership that will give subscribers of both platforms access to content through future Tata Sky platforms, and the DTH provider will also complement its content with Netflix’s entire library that includes more than 1000 hours of Ultra HD content.
However, eMarketer senior forecasting analyst Christoper Bendtsen believes: “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 — losses.”
Meanwhile, the streaming platforms are growing at the expense of pay TV losses. Growth is being fueled by more original programming and demand for multiple services. In fact, eMarketer has increased its future viewership estimates for YouTube, Netflix, Amazon and Hulu.
“The main factor fueling growth of on-demand streaming platforms is their original content,” says eMarketer principal analyst Paul Verna. “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.
“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.”