Cord-cutting is Growing Faster than Previously Forecasted
The cord-cutting trend doesn’t appear to be slowing down. In fact, according to a new report by eMarketer, the trend is occurring faster than previously believed. At the current rate, it’s predicted that 22.2 million U.S. adults will have cut the cord on cable, satellite or telco TV service by the end 2017—that’s up 33% over 2016.
To compound the problem for pay the TV providers, ad investment is only going to grow by 0.5% to $71.65 billion. The company’s first quarter forecast originally had that number at $72.72 billion.
“eMarketer expected a slowdown this year in TV ad sales, after 2016 benefited from both the Olympics and US presidential election,” said Monica Peart, eMarketer’s senior forecasting director. “However, traditional TV advertising is slowing even more than expected, as viewers switch their time and attention to the growing list of live streaming and over-the-top [OTT] platforms.”
The 22 million number is significantly higher than eMarketer’s prior estimate of 15.4 million cord-cutters by year end. Meanwhile, the number of “cord-nevers” (consumers who have never subscribed to pay TV) will rise 5.8% this year, to 34.4 million
“Younger audiences continue to switch to either exclusively watching OTT video or watching them in combination with free TV options,” said Chris Bendtsen, senior forecasting analyst at eMarketer. “Last year, even the Olympics and presidential elections could not prevent younger audiences from abandoning pay TV.”
Per eMarketer’s revised forecast, it’s estimated that by 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV—a total of 81 million U.S. adults. When that moment arrives, nearly 30% of American adults won’t have traditional pay TV.