Cable TV has been the most preferred way to get quality television content for decades now. However, there has been a shift from traditional viewership towards streaming services. Viewers have realized that despite its tasteful content, cable TV subscription is turning out to be heavy on their wallets.
With the rise of streaming services, one no longer needs to pay through the nose to access quality content; hence the rise of cord cutters.
In case you are wondering what “cutting the cord” means, let me elaborate.
Consumers who unsubscribe from cable/linear TV and move towards internet streaming services are called cord cutters. There also are individuals who have never subscribed to any traditional pay TV service. They are called cord nevers.
Cord cutting has been growing rapidly as streaming services such as Netflix, Hulu, and Amazon Prime have replaced the traditional means of watching TV. So one no longer needs to buy a TV in order to watch it. This has enticed millennial viewers.
How they behave?
Cord cutters primarily aim at limiting their expenses, but they also prefer to stream mostly on mobile devices. Cord Nevers also aim similar, but TV somehow fails to earn a share of their wallet.
Let’s have a look at the facts and figures about cord cutters, cord nevers, and subscription services across geographies.
How big they are?
According to a recent study, pay TV lost 762,000 subscribers in the first quarter of 2017 in the U.S. In 2015, 1.1 million people cut the cord, which rose to 1.7 million in 2016. That’s close to 55% growth in the number of cord cutters. Going by this trend, the numbers for 2017 can be quite promising.
In the US, the average age for cord nevers is 34 years and they represent 9% of all US consumers. More than half the cord nevers are millennials. YouTube is the most preferred streaming services followed by Netflix and Amazon. Cord nevers like short-form video content whereas cord cutters go for services such as PBS Video, Disney Movies, and A&E.
Global Subscription services
There are more than 2,563 on-demand services established in the entire EU. Studies reveal that revenues in Western Europe for OTT and online video market are expected to double between 2015 and 2021. UK’s share is 35% of Western European OTT market.
Only few Television channels such as HBO have managed to survive this rise in cord cutters by offering popular prestige series like Game of Thrones. Otherwise, it has overall been a struggle for cable providers to keep up with the pace of the changing trends unless they sell videos online. Now that we have looked at Netflix’s growth as an SVOD provider, it’s interesting to note how it is also heavily investing in content.
Typically OTT platform owners buy content from content owners or content distributors.
As per BTIG Research analyst Richard Greenfield, Netflix, the biggest SVOD company, listed its 2017 budget for content at $6 billion. This has set a benchmark that other SVOD companies would attempt to match.