According to a new study, cord cutting took place at an accelerated rate last year. In 2017, 1.5 million subscribers cut the cord and cancelled their cable services. But in 2018, that number leapt to 2.9 million, nearly doubling the previous year’s figure.
That’s bad news for cable companies, but as the media landscape changes, will customers end up paying even more than they did for cable in the long run?
Deadline relays the latest figures from a study by the Leichtman Research Group. As customers have dropped traditional cable packages, many have picked up “skinny” TV bundles instead, things like DirecTV Now and Sling TV. But while those services seemed like popular alternatives in 2017 when they experienced a 90% increase in growth, their growth percentage plummeted to only 19% in 2018. Even those cheaper skinny bundles aren’t proving to be a lifeline when customers are satisfied with watching shows and movies on Netflix, Amazon Prime Video, and Hulu – services where they get a tremendous amount of content for a comparatively smaller monthly subscription price.
But is the golden era of cord cutting already coming to an end? Sure, right now it makes financial and practical sense to ditch cable in favor of a few streaming services. But what happens when Disney+ is thrown into the mix, with its upcoming Star Wars and Marvel shows and movies that can only be seen on that service? What about WarnerMedia’s upcoming streaming service, which will include major movies from WB’s library, original content like a Gremlins series, and mega-popular streaming shows like Friends? How about the Criterion Channel, which launches next month and will be picking up where FilmStruck left off? And that’s not even factoring in streaming services from places like WalMart or Spectrum. You can see the problem: it won’t be long before we’re paying more than we ever did for cable. (Though I guess this method, we’ll at least be able to actually watch what we want instead of having to flip through hundreds of channels we don’t care about. Theoretically, anyway.)
Here’s a quote from Deadline that got me thinking:
Recent quarterly financial reports have offered an unsettling snapshot of skinny bundles, particularly at DirecTV parent AT&T. The company has chalked up recent subscriber losses at DirecTV Now to the expiration of an aggressive set of promotional discounts, as well as the recent decision to raise prices.
Several key players under the WarnerMedia umbrella recently parted ways with the company after clashing with the new ownership from AT&T, including the notable departure of HBO head Richard Plepler, who oversaw the premium cable channel’s rise to entertainment dominance over the past twenty five years. Will the new AT&T bosses try to make up for the losses in DirecTV customers by shaking up the way their new assets operate? What will the future of HBO look like? Cord cutting may end up costing us all much more than we initially thought.
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