Pay-TV Subscriptions are Down More Than 10% Over the Last 2 Years Due to Rising Rates and Lack of Programming
Cable TV providers are going to have a dire situation on their hands sooner rather than later. Since the end of 2014, subscriptions have been down about 10% for traditional pay-TV subscriptions (cable and satellite) according to industry analyst MoffetNathanson.
In fact, just during the last 90 days of 2016, TV providers lost 1.7% of their entire subscriber base. During the 90 days before that, they lost 1.4% of all subscribers. Obviously, such a decline cannot continue forever without major changes being made, or companies will start going out of business.
One of the more worrisome ways that pay-TV providers have been managing to keep revenues up is by increasing subscription rates. Essentially, they are making current customers pay in order to offset the loss of revenue from cord cutters. It’s a strategy that can only work for so long as it’s an older population that generally doesn’t want to bother with cord-cutting, while those under 60 are much more likely to cut the cord.
We can already see some of the resulting changes taking place among content producers, such as ESPN cutting $100 million out of the on-air personality budget.
For some people, cable providers are there to provide internet first and cable TV just comes with it, if they even elect to use it at all. That number seems to be growing significantly on a month to month basis. If the current trend continues, especially taking into account the number of people who move (a big trigger for cord cutting) at the beginning of the year, it’s reasonable to estimate that TV providers are going to lose another 2% of their customer base in the first 90 days of 2017.