According to a new industry report from PricewaterhouseCoopers, cord-cutting momentum has never been greater in the US, as the number of Americans who are subscribed to cable TV is now tied with the number of Netflix subscribers, and the latter are set to surpass the former.
The PwC survey included 1,986 Americans, ages 18-59, with an annual income above $40,000. The survey found that 73% subscribe to a traditional Pay-TV service, down from 76% in 2016 and 79% in 2015. 73% of respondents said they subscribe to Netflix, which is the same number of people subscribe to Pay TV. 82% of respondents said they would trim their Pay TV if access to live sports were cut.
While cord-cutting is hardly new, in the last 3 years its momentum has accelerated, and as traditional Pay-TV subscribers decline, “cord cutters”, “cord trimmers”, and “cord nevers” grow at an accelerating pace.
As PwC notes, a streaming explosion is occurring at all ages (18-59) for the 2017 year, but especially with people 50-59 years old, where 63% said they stream TV content versus just 48% last year. The number is not exactly surprising seeing how Netflix has been producing more content to rope in older audiences. Last week, Nielsen reported that more than half of viewers for the British historical drama The Crown are over 50.
Despite the rapid growth of streaming platforms, customers show signs of content overload:
Consumers are showing signs of being overwhelmed. While respondents indicate they have four services on average—including Pay TV and digital services—they only watch about two of those services on a regular basis. Just a quarter of consumers say they can handle using more than four services in addition to Pay TV. Looking for content only adds to the burden—a notion we analyze in depth in our sister Consumer Intelligence Series publication on content discovery.
PwC also appears to have called the bubble in the streaming space:
Having too many options might mean limited growth for incumbents and new entrants alike—the #1 reason for ending a subscription is “I didn’t use it enough” (29%). With all the energy and resources required to keep up with subscriptions and content, appreciation for the ease of Pay TV grows. Pay TV solves many of the issues that surround streaming, creating a relaxed and efficient viewing process. Pay TV spin-offs that can provide viewers with the best of both worlds are poised for success.
As the balance of power of shifts from cable to streaming platforms such as Netflix, PwC makes the interesting observation that we are approaching a saturation point amid the glut of streaming content which is becoming self-defeating and could hurt rather than help the streaming industry. And while it would lead to reduced churn, it would also be welcome news to NetFlix which is spending billions of dollars each year on content. How this tension is resolved remains to be seen. Until then, however, the great migration from TV to streaming will continue.
This article appeared at ZeroHedge.com at: http://www.zerohedge.com/news/2017-12-19/netflix-subs-verge-surpassing-all-cable-viewers
