Americans are cutting the cord and dumping traditional cable and satellite television subscriptions in favor of cheaper online streaming options at a faster rate, according to the latest survey.
In 2019, nearly 5.5 million customers who subscribed to large cable and satellite companies canceled their packages – a sharp leap from the 3.2 million subscribers who jumped the year before.
The figures reflect the ever-higher programming costs and the installation and equipment costs that come with traditional cable and satellite packages.
Experts say more Americans will opt for cable and satellite in favor of online streaming services.
“Cable companies have made peace with the idea that customers leave if they want,” said Moffett Nathanson analyst Craig Moffett. The Wall Street Journal.
“The companies accept programming price increases and pass them on to consumers, accelerating the downward spiral of pay TV.”
Over the past decade, the number of new pay-TV and cable pay-TV subscribers has decreased, while the number of people who have canceled their subscription has increased
Nearly 5.5 million people have dropped their TV and cable subscription, according to MoffettNathanson, a media and telecommunications research agency (stock)
In 2019, the major cable providers – Comcast, Charter Communications and Altice USA – lost around 1 million subscribers in total, according to public archives.
Satellite providers such as AT&T, which DirecTV offers, suffered even greater losses.
By the end of 2019, 3.4 million Americans have canceled their satellite and fiber optic cable TV accounts with AT&T, according to the Journal.
AT & T’s main satellite rival, Dish Network, lost more than 500,000 subscribers in the same period.
Experts say that the rising programming costs, especially sports, have led to more expensive cable and satellite bills.
Comcast plans to increase the rates for cable TV subscribers by 3.6 percent in 2020.
That is an increase compared to the 3.3 percent increase in the cable bill for 2019.
Altice, whose cable brands operate under the names Optimum and Suddenlink, will increase its prices by between 4 and 5 percent – a sharp leap compared to the usual annual increase of between 3 and 3.5 percent.
During a recent profit call, Comcast said it expects to lose more customers in 2020 than in 2019.
Last year, the telecom giant lost 733,000 pay-TV subscribers.
Sports and news have been the glue that customers have adhered to the traditional pay TV model, where customers pay hundreds of dollars per month for thousands of channels they don’t watch.
But sports and news channels are now available on streaming services with ‘skinny bundle’ such as YouTube TV, Hulu TV, Sling TV and AT&T TV Now, for only a fraction of the cost.
Cable and satellite providers must also face competition from streaming services such as Netflix and Hulu, which offer libraries with sitcoms, films and TV series for relatively low prices.
While subscribers flee cable and satellite, the “skinny bundle” streaming services are also struggling with rising programming costs.
PlayStation Vue, the live TV streaming service from Sony, was closed at the end of last year due to the high costs.
Other services such as Sling TV, Hulu Live TV, YouTube TV and AT&T TV Now have had to raise their rates.
SlingTV, which once offered a basic package of $ 20 a month, now costs its low-tier service at $ 30 a month.
Last week, a study by Nielsen showed that streaming services such as Netflix or Hulu account for 19 percent of television viewing in the United States – almost double what it was less than two years ago
The skinny bundle from AT&T, once available for $ 35 a month, now costs $ 65 a month.
The live Hulu television offer initially cost $ 40 a month. Now it’s $ 54.99.
The cable providers can find comfort in the fact that they have seen an increase in the number of customers who purchase their broadband internet service.
Last week, a study by Nielsen revealed that streaming services such as Netflix or Hulu account for 19 percent of television viewing in the United States – almost double what it was less than two years ago.
The percentage of time spent on streaming fell in a Nielsen study of March 2018 from 10 percent to 19 percent during the last three months of 2019.
More than half of consumers with the ability to stream, subscribe to two or more services, and 93 percent said they were planning to increase or maintain that number.
Watching live television in the past year has actually been less (3 hours, 44 minutes to 3 hours, 27 minutes), which explains the concerns in executive suites on television networks.
However, the streaming time is longer, from 29 minutes a day to 38 minutes in the same period.
The study, conducted by the Nielsen company, illustrated how fast consumers have embraced streaming as an alternative to live TV.