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State of the Screens

Cord Cutting Was Deep in Q3

By November 17, 2022No Comments

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Four big questions re: cord cutting:
1) How do Americans receive television?
2) How many homes currently subscribe to a pay-TV bundle?
3) What share of pay-TV subscriptions are streaming?
4) How many homes currently subscribe to broadband?

Big question #1: How do Americans receive television?

Share of U.S. TV households by source according to Nielsen:
1) Traditional pay-TV – 52%
2) Broadband-only – 33%
3) Antenna (OTA) – 15%

Wow: Broadband-only HHs are 20 years younger than the average U.S. HH.  44% of these households have children, and they are right in the middle of the 18-49 demo.  This trend is just getting started. 

Bottom line: A traditional pay-TV bundle reaches 51% fewer households than the top three streaming services (SVOD).  This is why advertisers are so excited about advertising on Netflix/Disney+.

Big question #2: How many homes currently subscribe to a pay-TV bundle? 

Quick answer: 77.2M

YoY change in pay-TV subscribers:
1) Traditional pay-TV –  6.1M
2) Streaming pay-TV –  2.0M
3) Total pay-TV –  4.1M

Why this matters: The largest decline (↓ 9%) YoY occurred during 2022-Q3. Streaming pay-TV (vMVPDs) is not picking up the slack since 3 households canceled traditional pay-TV for every 1 that added streaming pay-TV.

Quote from Anthony Crupi – Sports Media Reporter @ Sportico:

“If the [literal] decimation of the cable ranks in 12 months’ time isn’t sufficiently alarming, try zooming out a bit. In eight years’ time, 35.1 million households have parted ways with the likes of Comcast, Spectrum, DirecTV and DISH Network, and while the initial defections were minimal—in the second quarter of 2015, the rate of churn worked out to less than 1%—the losses have mounted in conjunction with the proliferation of alternative viewing platforms.”

YoY change for traditional pay-TV subscribers:
1) 2019-Q3 – ↓ 3%
2) 2020-Q3 – ↓ 8%
3) 2021-Q3 – ↓ 7%
4) 2022-Q3 – ↓ 9%

Total pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 92.6M
2) 2019-Q3 – 89.7M (↓ 3%)
3) 2020-Q3 – 82.9M (↓ 8%)
4) 2021-Q3 – 81.3M (↓ 2%)
5) 2022-Q3 – 77.2M (↓ 5%)

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Big question #3: What share of pay-TV subscriptions are streaming?

Quick answer: 18%

Streaming pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 6.5M
2) 2019-Q3 – 8.7M (↑ 33%)
3) 2020-Q3 – 8.0M (↓ 8%)
4) 2021-Q3 – 11.8M (↑ 48%)
5) 2022-Q3 – 13.8M (↑ 17%)

Streaming share of pay-TV subscribers:
1) 2018-Q3 – 7%
2) 2019-Q3 – 10%
3) 2020-Q3 – 10%
4) 2021-Q3 – 15%
5) 2022-Q3 – 18%

Traditional pay-TV subscriptions (YoY growth):
1) 2018-Q3 – 86.1M
2) 2019-Q3 – 81.0M (↓ 6%)
3) 2020-Q3 – 74.9M (↓ 8%)
4) 2021-Q3 – 69.5M (↓ 7%)
5) 2022-Q3 – 63.4M (↓ 9%)

Big question #4: How many homes currently subscribe to broadband?

Total broadband subscriptions (YoY growth) according to Leichtman Research Group:
1) 2019-Q3 – 100.6M
2) 2020-Q3 – 104.9M (↑ 4%)
3) 2021-Q3 – 107.9M (↑ 3%)
4) 2022-Q3 – 108.6M (↑ 1%)

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Quote from Craig Moffett – Analyst @ MoffettNathanson:
“Both Comcast and Charter have made it clear they are fully willing to let video customers walk, even to the point of helping them with streaming options if they desire.”

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.