A stunningly low number of consumers plan to keep their pay-TV service this year. Just less than one-in-eight people plan to keep their cable subscriptions, says a new survey of Americans.
The nationwide study of consumers who have or have had pay-TV service doesn’t necessarily break any new ground. Cord-cutting has been a “thing” for a couple of years. But the surge of potential cord cutters has to be startling to operators. After all, the decline, so far, has been a gradual one.
Consultant Waterstone Management Group, said it found 59% of the 5,027 respondents already have cut the cord. Another 29% say they are weighing their options. Those planning to keep pay-TV? Just 12%. (Four percent of respondents were “cord nevers” and were excluded from the results.)
Waterstone used Amazon’s Mechanical Turk platform to conduct the study, which gets mixed reviews from researchers since the data can skew. Still, it’s seen by many social scientists as a legitimate research tool.
Consider that in Q3 2018, pay-TV services saw more than 1.2 million customers walk away, according to media research firm Kagan. That was the industry’s worst quarter ever.
A difficult quarter
So far, Q4 2018 also has been painful. Verizon, for example, was down 46,000 FiOS video subs. It lost 29,000 last year. Comcast lost 29,000 subs in Q4, in line with the 33,000 subs it lost the previous year.
AT&T, meanwhile, the largest pay-TV operator in the U.S. following its acquisition of DirecTV, lost more than 400,000 satellite customers. The tide also has been ebbing for its Internet pay-TV service, DirecTV Now. That service lost 267,000 subs. Of course, DirecTVNow is coming off a series of price-reducing promotions and also has instituted a $5 per month price hike to boot.
Dish Network, which in Q3 lost a whopping 367,000 video subscribers from its satellite service, while adding just 26,000 Sling TV subs, could be in line for another tough quarter.
Virtual pay-TV services like YouTube TV and Hulu, along with SVOD services like Netflix and Amazon Prime, continue to see strong growth, even while raising prices.
Sixty-nine percent of 415 Netflix subs told Hub Research they would be keeping their subscriptions to the service, despite price hikes. Netflix announced increases of $2 increase across the HD and 4K plans and a $1 increase on the basic plan. Only 9% of current subscribers said they might cancel the service. Another 16% said they might downgrade. Surprisingly, 6% said they planned to upgrade.
The bottom line
Americans continue to migrate to SVOD and vMPDs as more premium content and originals come online. With Disney, Apple and NBCUniversal also planning to enter the OTT market before the end of the year, cord-cutting will accelerate dramatically. Operators are looking for ways to mitigate the impact on their pay-TV service.