The amount of US households who have “cut the cord” is approaching parity with those still subscribing to pay-TV according to a new report.
The study by eMarketer found that by the end of 2019 the number of US pay-TV households will fall by 4 per cent to 86.5 million and will continue to fall below 80 million by 2021.
Meanwhile, the report predicts that, by 2023, the number of pay-TV households will stand at 72.7 million, while the number of those without a pay-TV package will number 56.1 million. The report suggests by that point one fifth of US households will have become cord cutters.
“As programming costs continue to rise, cable, satellite and telco operators are finding it difficult
to turn a profit on some TV subscriptions,” said eMarketer forecasting analyst Eric Haggstrom.
“Their answer has been to raise prices across the board, and it seems that they are willing to lose
customers rather than retain them with unprofitable deals. This has been a boon for TV providers, who also offer broadband internet, as it removes consumers from bundled deals. It forces consumers to pay a higher price for internet, which dramatically improves profit margins.”
eMarketer suggested that the accelerating pace of cord-cutting is caused by TV providers themselves as they put improving profit margins before revenues. “That is coming at the expense of subscribers, who often drop services when prices rise and promotional deals don’t get renewed,” the report said.