In 2022, according to Leichtman Research, major pay-TV providers lost about 5.9 million subscribers in 2022. The trend appears to be accelerating, with 889,000 subscribers cutting the cord in third quarter of 2023, according to an analysis by MoffettNathanson, the industry’s worst third quarter ever.
As a result, pay-TV penetration of U.S. households — including multi-channel streaming services like YouTube TV — dropped to just 55% of TV households, the lowest since 1989. YouTube TV is the largest of the multi-channel services, with nearly 7 million subscribers. By 2027, PwC predicts that figure will drop to just 38% of U.S. households.
A major driving force behind cord-cutting is the popularity of streaming services. Netflix added 13 million subscribers in the fourth quarter of 2023, bringing its worldwide total to 260 million. NBC just set a record for internet use, accounting for 30% of web traffic, when it aired the Kansas City Chiefs vs. Miami Dolphins Wild Card game exclusively on its streaming service Peacock. It was the most streamed U.S. event ever, drawing 23 million viewers.
According to a Deloitte Digital Media Trends survey, 69% of American consumers now have at least one streaming service subscription. This shift towards on-demand content allows viewers to watch what they want when they want it, eliminating the need for expensive bundled channels, and is part of the Control Enthusiast phenomenon.
Of course, the cable industry only has itself to blame. Extraneous cable TV subscription fees have skyrocketed. In early 2023, Comcast raised its Xfinity broadcast TV fee to $21.30. In 2016, this fee was just $5 a month. No wonder pay TV households dropped from 100 million to 60 million between 2013 and 2023.
The cost-saving potential of cord-cutting is another key factor contributing to the growing popularity of streaming. Traditional cable subscriptions often come with high monthly fees for additional premium channels and equipment rental charges. In contrast, most streaming services offer affordable monthly plans that can easily be canceled or paused.
A desire for more personalized viewing experiences is another driver behind cord-cutting. Streaming services provide users access to extensive content libraries spanning various genres and languages. They also offer personalized recommendations based on viewing history and user preferences. Furthermore, many streaming platforms allow simultaneous multi-device use without having to rent another cable TV box.
As more streaming services emerge and improve their offerings, the cord-cutting trend will only continue to grow.