Cord-cutting has achieved another milestone in its journey to replace cable TV.
A recent SVB MoffettNathanson report mentioned that the increasing growth of cord-cutting decisions led to cable TV subscribers hitting record lows never seen before since 1992.
SVB MoffettNathanson is a "next generation" sell-side research boutique that partners with sector-dominant research analysts to distribute their findings to clients on a sector-by-sector subscription basis, per its About Us page.
SVB MoffettNathanson Cord-cutting Report Details
SVB MoffettNathanson senior analyst Craig Moffett wrote in a report on the cable and TV streaming industry for the first quarter of 2023 that pay-TV penetration hit an all-time low of 58.5% in the US - its lowest point since 1992, two years before DirecTV launched as a rival to cable TV, per Variety.
By the end of 2023's first quarter, US pay-TV subscribers fell by nearly 7% on an annual basis, meaning that it only had 75.5 million customers after the period.
Cable TV didn't fare well during the growth of streaming platforms, either. Cable TV operators' growth rate declined during Q1, with it losing 9.9% of subscribers year over year, while satellite TV providers like DirecTV and Dish Network fell by around 13.4%.
Case in point, Comcast and Dish Network, two of the most popular cable and satellite TV networks, respectively, were the worst hit in their respective categories. The former lost 614,000 subscribers during Q1 2023, while the latter saw a 13.4% decline in its user base, per Android Police.
Additionally, virtual multichannel video programming distributors, or MVPDs, lost 264,000 customers during the same period, counting as one of the worst quarters to date for the segment.
Moffett interprets these findings as the result of the increasing desire of Americans to cut cords and subscribe to Streaming services like Netflix, Disney+, and Peacock instead, where they could watch their favorite series and movies on demand regardless of ads. Additionally, the rising subscription prices for pay-TV services are pushing away subscribers and forcing distributors to increase their prices further.
"The picture is not one that suggests that a plateau in the rate of decline is coming any time soon," Moffett said in his report, meaning that pay-TV networks will lose even more households in the coming months.
Why Are People Cutting The Cord?
People are choosing to pay for streaming services compared to traditional cable TV due to various factors. According to Free PC Tech, streaming platforms are cheaper, more flexible, and offer more content than traditional cable TV.
With streaming platforms, people can watch what they want when and where they want, while cable TV forces you to follow their airing schedule to watch the show you want.
Additionally, the compatibility of streaming platforms to various devices provides easier access to content compared to traditional cable TV.
However, the increasing subscription prices for many streaming services could cost the video streaming industry more than a few subscribers, with Disney CEO Bob Iger raising subscription prices to offset company expenditures due to economic uncertainties and the ongoing recession.
