Survey: Pay TV Exodus Accelerates in the U.S.

Cord-cutting — the practice of dropping traditional cable TV in favor of internet-delivered content — is expected to jump more than 30 percent this year, according to the latest forecast from eMarketer.

The number of adults who have cancelled pay TV service and continue without it — a.k.a. “cord cutters” — is projected to reach 33 million in 2018, even as pay TV providers form partnerships with internet-based (a.k.a. over-the-top or OTT) rivals to retain customers. The new projection represents a 22 percent increase over the 27 million cord cutters eMarketer was projecting a year ago.

Almost 187 million U.S. adults will watch cable/satellite/telco-delivered pay TV in 2018, down 3.8 percent from the previous year and slightly higher than the 3.4 percent decline in 2016-2017. Satellite providers will have the biggest decline, followed by telco, eMarketer said.

“Most of the major traditional TV providers [Charter, Comcast, Dish, etc.] now have some way to integrate with Netflix,” said senior forecasting analyst Christopher Bendtsen. “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 — the losses.”

Meanwhile, streaming platforms continue to grow at the expense of pay TV, according to eMarketer, which has increased its future viewership estimates for YouTube, Netflix, Amazon, and Hulu. The growth is being fueled by an increase in original programming and demand for multiple services.

“The main factor fueling growth of on-demand streaming platforms is their original content,” said 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 delivered via the internet without the need for installation fees or hardware.”

Forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies, according to eMarketer. Data is then weighted based on methodology and soundness.

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