“Cord cutting” is a fast-growing trend among US residents. It involves “cutting the cord” on satellite and cable TV and instead opting for internet TV and streaming services. Although cord cutting is still in its infancy compared to traditional methods for viewing content, its rapid and expanding growth in the past several years means there are plenty of cord-cutting stats and trends available in 2020. Here are the most startling and most interesting cord-cutting facts for the current year and beyond.
1. Cord cutting is causing a massive drop in cable TV subscribers
Cord cutting is responsible for major cable TV providers losing millions of customers they can’t seem to win back. In fact, traditional pay-TV providers lost over 1.7 million subscribers in the third quarter of 2019 alone.
In total, cable TV and satellite TV subscribers lost over 6 million subscribers in 2019, most of whom were fleeing to live TV streaming services such as Sling TV, YouTube TV, and Hulu with Live TV. Some were even dropping live TV altogether in favor of on-demand streaming services like Netflix and Disney+.
The largest traditional cable TV providers experiencing subscriber losses include:
- Comcast: This company had 22.3 million video customers by year-end 2017. At the end of 2018, that number was down to 21.9 million. By the end of 2019, the company had lost an additional 733,000 video subscribers.
- Verizon: Subscriber numbers for this company have decreased every quarter since Q4 2016.
- Charter: This organization is now losing tens of thousands of video customers each year. Its CEO blames higher carriage fees imposed by programmers as a key trigger for customers who are moving on to cord-cutting services.
- DirecTV (satellite): This AT&T-owned company lost over 2.3 million satellite TV subscribers between 2017 and 2019. Some of those subscribers eventually went to its internet TV streaming service, AT&T TV Now (formerly DirecTV Now), although most of its traditional pay-TV subscribers likely went to competitor services like Sling TV and YouTube TV.
This bloodletting is expected to continue unabated for the time being. Even Comcast—which has experienced unquestionably the largest loss of cable TV subscribers of the bunch—is not optimistic about its pay-TV prospects. The company predicts it will see even more of its customers dropping its traditional cable TV packages this year.
Many Americans still maintain both traditional TV and cord-cutting services, however. As of 2019, 43% of Americans had both pay-TV and streaming video-on-demand(SVOD) subscriptions.
2. Traditional cable prices are a leading cause of cord cutting
According to the FCC’s 2018 Report on Cable Industry Pricing, the average cost of expanded basic cable services was just over $73.08. That number, however, does not include the cost to purchase or rent equipment from cable TV providers, nor does it include the cost of taxes and fees.
If a 2018 Consumer Reports study is any indication, the FCC’s numbers are way off. Consumer Reports found that the average monthly cable TV bill was over $217, which included the average package cost (over $156), government fees and taxes, company-imposed fees, and the cost of premium serves added to the package.
Many cord cutters instead opt for a live TV streaming service, such as YouTube TV, Hulu with Live TV, or Sling TV, which cost a fraction of that and don’t come with the added fees.
3. Ads are also major driver toward cord cutting
Traditional pay-TV has always been driven by ads, but with more options, ad-hating cord-cutters are starting to see themselves out. A large majority (70 percent) of consumers believe 20 minutes of ads for a program one hour in length is too many. A further 82 percent very much dislike seeing the same ads over and over again. Overall, eight minutes of ads appear to be enough to keep pay-TV subscribers from ditching solely on ads, while 16 minutes of ads is a breaking point for many.
4. Live TV services are quickly adding subscribers
As subscribers abandon their traditional pay-TV providers, they’re now going into the open arms of live TV streaming services. Whether you call them “IPTV” (though that term is more regularly applied to illegal live TV streaming options) or Virtual Multichannel Video Providers (vMVPDs), there are now a handful of internet-based services on the market designed to replace cable and satellite TV.
Subscriber counts for the most-used cable TV replacers include:
- YouTube TV: Over 2 million subscribers as of 2020
- Hulu with Live TV: Over 3 million(pdf) subscribers as of 2020
- Sling TV: Over 2.6 million subscribers as of 2020
- FuboTV: Over 250,000 subscribers as of 2019 (limited data available)
- Philo: Over 50,000 subscribers as of 2018 (limited data available)
- AT&T TV Now: Around 900,000 subscribers as of early 2020. Notably, the company lost over 700,000 subscribers in 2019 alone and is the only service of its kind still on the market to lose market share since launching. (The now-discontinued PlayStation Vue also saw its subscriber counts decline.)
PlayStation Vue would have made that list as well. However, Sony officially dissolved the service at the end of January 2020. PS Vue had around 500,000 subscribers when it shuttered its digital doors.
Other services exist in this space, although their subscriber numbers are difficult to come by. These most notably include AT&T WatchTV and the newer service Vidgo. AT&T excludes WatchTV from its published subscriber counts for over-the-top (OTT) TV services, while Vidgo, which launched in late Q4 2019, has offered no data on how it’s doing thus far.
5. Live TV services are raising their prices
Even as cord cutting options for live TV slowly make their way to market, their prices have gone up remarkably in the past few years. Almost every live TV streaming service that’s been on the market for more than a year has experienced at least one price increase. Most have imposed multiple price increases since launching.
Almost every live TV streaming service increased prices in 2019.
- AT&T TV Now: This service increased prices by $15 per month on its “Max” and “Plus” packages in 2019, taking those packages from $50 to $65 and $70 to $85 per month, respectively.
- YouTube TV: Google increased the price of its single live TV streaming package from $40 to $49.99 per month in 2019.
- Philo: Although Philo technically didn’t raise prices in 2019, it did drop its $16 per month plan, leaving just its higher-priced $20 plan.
- FuboTV: Every package available through fuboTV received a $10 per month increase, starting with its “Fubo” package which jumped from $44.99 per month to $54.99 per month.
- Hulu with Live TV: Hulu increased prices on its Live TV service in late 2019 by $10 per month, raising it from $44.99 to $54.99 per month.
- Sling TV: The company delivered its second price increase in its 5-year history in late 2019. Its Orange and Blue packages increased to $30 per month from $25 per month, while its combo package increased from $40 per month to $45 per month
- PlayStation Vue: Although the service expired in January 2020, Sony added an extra $5 per month on every package the service offered in the middle of 2019. The minimum price went from $45 to $50 per month
Almost universally, these price increases were far from insignificant—especially for AT&T TV Now. That service increased its entry-point subscription price in 2019 by 30 percent compared to its price in 2018. Only the now-canceled PlayStation Vue service had more modest price increases across its packages.
Meanwhile, Philo remained the lowest-cost major player despite a pseudo price increase. The company dropped its smaller and cheaper package in favor of a single-package option. (Note: AT&T WatchTV is still the cheapest on the market at $15 per month.)
Price increases for these services are almost always tied to demands from the channel providers. Carriage fees are increasing for cord-cutting services and traditional cable TV services alike as the channel providers they offer (local broadcast networks, in particular) ask for more money.
In fact, local broadcast network fees are up over 600 percent since 2006, while all TV network fees (local, premium, and cable networks) are up around 90 percent since 2009.
6. Despite price increases, live TV streaming services experienced sustained growth through 2019
Aggregated Google Trends data reveals that cord-cutters are increasingly interested in live TV streaming services, with no signs of stopping. In fact, aggregated search interest from 2015 to 2019 for the top seven largest OTT services reveals search interest in these services was the highest it’s ever been in September 2019.
Sling TV was the first major cord-cutting service to launch on the market, offering an “a la carte” live TV model. It was later followed by PlayStation (also 2015). Meanwhile, 2017 was a breakout year for this niche as five out of the seven largest multi-channel streaming TV providers launched that year. The most recent major service launch was AT&T WatchTV, which entered the market in 2018. WatchTV was a direct response to the no-sports Philo.
We did not include the Vidgo live TV streaming service for this stat due to its low profile.
7. Sling TV’s dominance is waning
Sling TV’s place on the market, combined with its successful marketing campaigns, helped it dominate in the OTT space for most of the past five years. However, increased competition is now eating away at its market share. This is evidenced both by Sling TV’s slowing subscriber growth rate, as well as the negative search interest it’s experiencing on search engines.
The real breaking point for Sling TV appears to have been late October/early November 2017, or around six months after YouTube TV officially entered the market. Google soft-launched its YouTube TV service in only a handful of major cities but rapidly expanded the service area by the end of 2017. YouTube TV’s search interest finally reached a sustained dominance over Sling TV in January 2019, the same month Google officially announced that its YouTube TV service was available everywhere in the US.
To be fair to Sling TV, the platform is far from struggling. It’s still the second-most searched for OTT service on the US market when compared to the other four popular OTT services (YouTube TV, Hulu with Live TV, Philo, and FuboTV).
While YouTube TV and Sling TV battle it out for first place in the market, Philo, FuboTV and Hulu with Live TV are all struggling for third place.
Nevertheless, the most important data to go on here are not Trends search interest numbers, but subscriber counts. On that end, Hulu with Live TV is the clear winner with over 3 million subscribers as of 2020.
8. The on-demand streaming market is getting fierce—and overcrowded
Netflix is currently the biggest over-the-top (OTA) on-demand streamer available for cord-cutters. The company was the first to successfully deliver a real on-demand streaming experience to subscribers, giving it an edge over the growing number of competitors. By the end of 2019, Netflix had over 167 million subscribers worldwide.
Now, there are hundreds of on-demand streaming services crowding the market, all competing for a limited number of subscribers. One study found 70 percent of consumers think there are too many choices on the market right now, which is not good news for new entrants.
The most notable new players include:
- Disney+: Launched November 12, 2019, in select countries, with worldwide launches scheduled through 2021
- Apple TV+: Launched November 1, 2019, worldwide
- Peacock (NBC): Launches July 15, 2020
- Discovery/BBC: Launches sometime in 2020
- HBO Max: Launches May 2020
- Quibi: Launches April 6, 2020
Outside of this, cord cutting allows users to choose between over 100 different niche on-demand services. This market saturation has created what some observers are calling a streaming service bubble. When that bubble will burst, however, is difficult to predict.
Currently, most Americans only pay for three streaming services. Providers need to either convince Americans to pay for more services, persuade them to drop a pre-existing service, or develop tricky plans to get TV fans to add more without thinking about it (such as by bundling services with wireless phone plans).
How to watch Disney+ with a VPN
9. Cord cutters are attracted to original content
Companies like Netflix, Hulu, and HBO are in an arms race of sorts over original content. One analysis found that cord cutters are driven primarily by original content when they choose to subscribe to streaming services.
This was confirmed by a 2019 Deloitte survey, which found that 57 percent of US streaming service subscribers are driven by original content. On a more granular level, 71 percent of millennials stated that original content was their primary motivating factor.
10. On-demand streaming services respond by spending big on original content
The number of on-demand services in the market is helping to drive up original content spending budgets. Consumers are hungry for unique and original stories, and providers are trying to win subscribers by providing high-quality content consumers can’t find anywhere else.
The biggest original content spenders include:
- Netflix: The company is predicted to spend over $17 billion on content in 2020, over half of which is going to its original content plans.
- Apple TV+: Apple plans to spend at least $5-6 billion on all-original content in 2020.
- Disney+: The company is pumping $24 billion into original content.
- Peacock: Comcast is spending $2 billion on content for its new service in the first two years.
- Amazon Prime Video: Amazon is spending at least $6 billion on original content.
- Hulu: Disney has allotted around $2.5 billion for Hulu’s original content.
- HBO/HBO Max: AT&T is giving HBO a $1.5 billion content budget in 2020.
As providers deliver bigger budgets to their original content writers, cord-cutters are certainly benefiting even as they hit their breaking point for how many services they want to pay for.
Unsurprisingly, password sharing is increasing as a result. Major services like Netflix and others are now considering cracking down on the practice. One study even puts the cost of password sharing on the streaming industry at $9.1 billion in lost potential revenue.
11. Netflix’s “original” content game is still confusing
Nobody is going to question the dominance Netflix maintains in the cord-cutting market. Still, Netflix continues to confuse the masses into thinking its original content is actually “originally produced” by Netflix.
Among its top-rated shows (those scoring a combined average of 80/100 or more on Rotten Tomatoes and IMDb), 25 percent were licensed movies or TV shows. Netflix has a policy that allows it to slap the “original” title onto content that it has exclusive international rights to stream.
That said, original content that the company has developed in-house (or “true” original content) is doing quite well. An impressive 75 percent of its top-rated content is completely original to the service.
Netflix is also producing top-rated original content at a mad clip, helping fuel the ongoing streaming wars. Over half of its top-rated developed content was produced in 2019 and 2018 alone.
Cord cutting predictions for 2020 and beyond
There are some interesting trends to watch going forward. Here are five key predictions on the future of cord cutting statistics:
- At least one more live TV streaming service will shut down in 2020. AT&T TV Now is already on the chopping block, but another service may get discontinued, such as AT&T WatchTV.
- NBC’s ad-supported Peacock will do well, but only among free subscribers to the ad-supported option. NBCUniversal will struggle to get paid subscribers in the first few years.
- Netflix will raise prices on its American subscribers.
- YouTube TV will raise prices above the $50 mark—likely to match Hulu with Live TV at $54.99. To compensate, the service will either add more channels or an additional feature.
- HBO Max will confuse subscribers but may have a surprising level of success.
- 1. Cord cutting is causing a massive drop in cable TV subscribers
- 2. Traditional cable prices are a leading cause of cord cutting
- 3. Ads are also major driver toward cord cutting
- 4. Live TV services are quickly adding subscribers
- 5. Live TV services are raising their prices
- 6. Despite price increases, live TV streaming services experienced sustained growth through 2019
- 7. Sling TV’s dominance is waning
- 8. The on-demand streaming market is getting fierce—and overcrowded
- 9. Cord cutters are attracted to original content
- 10. On-demand streaming services respond by spending big on original content
- 11. Netflix’s “original” content game is still confusing
- Cord cutting predictions for 2020 and beyond