The migration of Americans from pay TV to internet TV options is accelerating quickly in 2018, according to a new study conducted by management consultancy cg42.
The study says more than 5 million U.S. consumers will end their cable subscriptions this year, a 685% increase over 2016. The study estimates that pay TV providers will lose $5.5 billion in revenues they might otherwise have collected from cord-cutters and cord-nevers (people who’ve never had a cable subscription).
Why are more people fleeing or ignoring pay TV? In order of popularity: frustration with high prices, having to pay for channels they’ll never watch, anger at being nickel-and-dimed by fees, and frustration at new customers getting better deals.
“They constantly price gouged and tried to raise my rate,” said one Comcast cord-cutter who responded to cg42’s survey. “I got tired of having to play their game every year to renegotiate.”
The cg42 study predicts Comcast will lose 7.2% of its subscriber base (or about 1.5 million customers) to cord cutting in 2018. That adds up to a revenue loss of $1.6 billion for the cable giant. AT&T (and its DirecTV satellite subsidiary) will lose 4.8% of its 24 million customers this year, and about $1.2 billion in revenue, predicts the study, which was conducted in September of 2017.
In order for cg42’s projections to materialize, however, pay TV losses will have to accelerate this year. Comcast reported a loss of just 96,000 video subscribers in its March-ending quarter. AT&T’s DirecTV reported losing 188,000 satellite TV subscribers in Q1, while subscribers to AT&T’s fiber-based U-verse TV service remained virtually unchanged at 3.63 million.
Still, AT&T recently cited increasing cord-cutting and competition from internet TV providers as part of the reason it needed to acquire the video content producer/owner Time Warner. That merger won court approval and was completed last month, but the Department of Justice has since filed to appeal.
A total of 3,385 U.S. consumers responded to cg42’s survey: 1,030 cord-cutters, 599 cord-nevers, and 1,756 pay TV subscribers.