Cable TV subscriptions in the U.S. peaked in 2012. According to BI Intelligence 97.6 million Americans paid to watch television via cable, and it appeared traditional media was stronger than ever. However, cable subscriptions have now steadily declined.
The usual suspects such as Hulu, Amazon Prime, Netflix and HBO Go are the ones to blame for cable declines. A recent report by MoffettNathanson Research showed 81 percent of adults under 35 have a Netflix subscription. Millions of Americans are watching television from their smartphones or other smart devices making app-based services convenient choices.
We hear so often that cord cutters are cancelling their cable services signaling the end of cable…but are they wrong?
The consumer has their own definition of TV which isn’t what most assume. Consumers now perceive “TV” as content. As posted in my last blog Content remains king in cable, content remains the focus of what consumers want and the quality not the hardware that is delivering it.
A rise in streaming, a rise in cable
A rise in streaming doesn’t equal a loss in cable subscribers. While 1.2 million Americans have “cut the cord” in the past four years, these cord cutters only account for 1 percent of cable subscribers.
Again, consumers just want to access their content quickly and affordably, but streaming services have increased year over year since 2011. Netflix went from 25 million in 2012 to almost 45 million in 2015 and Hulu went from 6 million users in 2014 to 9 million in 2015.
Netflix has also begun to increase their members from the original rates back in 2014 from $7.99/month to $8.99/month beginning in 2016 for two concurrent streams and the platinum package of four streams is $11.99/month and prices will continue to increase as content becomes more valuable.
But even if you combined Netflix and Hulu that would still only be about half the total of cable subscribers which shows that streaming isn’t subtracting from cable subscription it is merely adding to the market share.
Let’s talk numbers
In 2012, roughly 127.6 million Americans paid for TV or TV-like content:
- Cable/satellite: 97.6 million
- Netflix: 27 million
- Hulu: 3 million
Compare that to the 150 million Americans paying for TV today:
- Cable/satellite: 96.5 million
- Netflix: 44.74 million
- Hulu: 9 million
TV providers aren’t going anymore; TV is just evolving into a new space while delivering content consumers want.
With content being the focus, this allows cable providers to get creative on how they can deliver that content and who to partner up with or against.
Companies like Comcast partner with DreamWorks and NBCUniversal to collect that content consumers are craving and will watch on whatever medium decides to hold it.
This allows cable to show their versatility in how and where they can showcase their content and stay relevant in the game.