How people watch TV and movies at home has changed so much in just the last few years. Streaming used to be seen as an add-on option to watching traditional television via cable or satellite, but over the last few years, people have been “cutting the cord” and transitioning completely to streaming platforms. Now, for the first time, more people in the U.S. are reportedly getting their TV via streaming rather than cable or satellite.
A new report from Samba TV finds that only 48% of Americans have a monthly subscription to a cable or satellite TV service, meaning that more than half of viewers do not. This is the first time that the annual report has crossed that midpoint. And certainly, it’s not good news for the companies that have built their business around providing such services, but we've seen companies like DirecTV losing subscribers for years.
The bigger issue, however, may be with advertising. Television commercials have been one of the main ways that companies marketed their products to consumers for decades. Now, it seems that more than half of the potential market isn’t seeing those ads. This could potentially result in a significant shift in where advertisers spend their money, which, in turn, could result in even bigger changes for traditional broadcast television. With Netflix and Disney+ both adding ad-supported options, it's potentially even better news for streaming.
While something that is bad news for traditional linear networks is pretty good news for streaming in general, it’s not all good news for individual streaming platforms. The report finds that more than two-thirds of respondents plan to “subscription cycle” in the next six months. This is the practice of ending a subscription for one service before picking up another. For those that are only interested in a particular show or shows, it allows users to only pay for a service for as long as it takes to watch what they’re interested in, then they move on.
Of course, not paying for cable or satellite doesn’t necessarily mean that more than half of households have completely changed the way they access television. Several traditional cable or satellite providers also offer an internet-based version of essentially the same service. Streaming platforms like Hulu and YouTube also offer Live TV options that essentially function the same as cable and satellite, and it’s unclear what percentage has shifted to one of these options.
It seems unlikely that now that things have crossed the 50% threshold we’ll ever see cable or satellite dominant again, Having said that, things are still very chaotic in the world of streaming. Prices of individual services continue to go up. Netflix is in the middle of cracking down on password sharing which is causing at least a small-scale revolt in Canada. It’s possible that we’ll simply never see a large percentage of the country get their TV the same way again, which could make things very difficult for the people trying to advertise to them.
