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Cord Cutting Accelerates – Digital Gabe
Digital Gabe
Cutting Edge Commentary On All Things Media

Cord Cutting Accelerates

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Here’s a stat straight out of a Network TV exec’s scariest horror thriller – the cord cutting rate in the US is now estimated to be over 5% in 2019.  That means for every 20 traditional TV subscribers on January 1st, there will only be 19 by New Year’s Eve.  To give you an example of what I’m talking about consider this stat . . . during Q2 alone AT&T’s Direct TV unit reported 1.25M in customer attrition.  Now imagine extrapolating that stat over the entire TV industry, quarter after quarter.

Based on the acceleration of cord cutting, it’s understandable that investment analysts in the TV sector are starting to rethink their positions with the traditional TV players.  Michael Nathanson (partner in MoffettNathanson Research) put it mildly in a report issued yesterday when he said, “While we applaud companies’ efforts to turn their stories around and build their respective lifeboats for the future, the data points should raise serious concern over the rate of decay of the traditional ecosystem.”

Interestingly, there’s one short-term positive consequence of the cord cutting phenomenon.  Since cord cutters are typically marginal TV consumers (who get less value from traditional TV), the viewers who remain are consuming more TV on average.  As a result the average tune in time for the Networks has risen 15% from 28.1 minutes to 32.2 minutes over the past five years, and Cable’s length-of-tune has increased 16% from 20.4 minutes to 23.7 minutes over the same period.  At least the die-hards are sticking with TV!


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