Millions of households will cancel TV subscriptions this year, eMarketer projects
While stay-at-home orders and lockdowns have been a boon for streaming services worldwide this year, paid television’s slide has only accelerated with a record number of U.S. households canceling their TV subscriptions amid the pandemic, research from digital analysis firm eMarketer shows.
By the end of 2020, 6.6 million fewer American homes will have cable, satellite or telecom TV packages than they did on New Year’s Day—down 7.5 percent year-over-year. This year’s decline marks the largest-ever drop in paid TV users since the medium’s popularity peaked in 2014.
“Consumers are choosing to cut the cord because of high prices, especially compared with streaming alternatives,” says Eric Haggstrom, a forecasting analyst at eMarketer’s Insider Intelligence, who notes that the loss of live sports in the first half of the year likely exacerbated the decline. “While sports have returned, people will not return to their old cable or satellite plans,” he says.
Overall, 77.6 million households will still be paying for a television service by the end of 2020—a number that’s down 22.8 percent in the past six years.
While linear TV’s slide may stabilize in 2021 with scripted shows resuming filming, live sports’ schedules normalizing, and the economy-shaking unemployment rate improving, the medium’s annual decline in the U.S. is unlikely to reverse course. And, by 2024, more than one-third of all-time paid TV users will have cut their services, eMarketer predicts, leaving roughly half of American homes without traditional television.
This year’s drop in subscribers coincides with a major decline in TV advertising dollars. In 2020, TV ad spend dropped 15 percent to around $60 billion—the lowest it’s been since 2011—and is projected to remain below pre-pandemic levels for the next few years at least (though massive third-quarter political spending this year will give it a much-needed boost).
“As pay TV subscriber losses accumulate, cable providers have been focusing on their internet services, which are more profitable and have benefited from the consumer shift to streaming video,” Haggstrom says.
For streaming services, 2020 has been a banner year. In the first months of the pandemic—aided by the addition of binge-worthy, can’t-look-away shows like “Love Is Blind” and “Tiger King”—Netflix added more than 15 million subscribers, double its own estimate.
At the same time, a glut of new streaming platforms that have debuted in recent months, including Quibi, NBC’s Peacock and a range of “plus” platforms, means consumers looking to shift away from traditional TV have more options than ever.