July 25, 2018
AT&T bought Time Warner to support its over-the-top video aspirations. Disney will launch a branded OTT service next year. Netflix, Amazon Prime Video and Hulu dominate the domestic SVOD market.
The trend is clear: The number of cord-cutters — adults who have canceled pay-TV service and continue without it — will climb 32.8% this year to 33 million, according to new data from eMarketer. That’s higher than the 22% growth rate (27.1 million) projected in July 2017.
Overall, 186.7 million U.S. adults will watch pay-TV in 2018, down 3.8% from last year. That’s slightly higher than the 3.4% dip in 2017. Satellite providers will have the biggest decline, followed by telecom (i.e. AT&T).
“Most of the major traditional pay-TV providers now have some way to integrate with Netflix,” Christopher Bendtsen, senior forecasting analyst, said in a statement. “These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn this year.”
Another factor driving the acceleration of cord-cutting is the availability of compelling and affordable live TV packages that are delivered via the internet without the need for installation fees or hardware.
“With more pay-TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow — but not stop — the losses,” said Bendtsen.
Meanwhile, the streaming platforms are growing at the expense of pay-TV. In fact, eMarketer has increased its future viewership estimates for YouTube, Netflix, Amazon and Hulu. Growth is being fueled by more original programming and demand for multiple services.
“The main factor fueling growth of on-demand streaming platforms is their original content,” added analyst Paul Verna said. “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.”