Next to perhaps the automobile or the internet, few
technological innovations have shaped American and world culture as much as the
television. Not only did the TV bring the awe and wonder of the big screen
right into people’s homes, making it possible for the average person to enjoy
entertainment at a moment’s notice, but it has also helped bring us closer
together by making it easier for people to learn about world events and other
However, how we watch TV has changed dramatically over the
years, starting with basic rabbit ears antennas all the way to fiber optic
cable connections. But the growth of high-speed internet connections has
It is now possible to stream television shows from a
variety of different sources, and this has become so popular that many people
no longer see a need to even have cable, something that would have been
completely unthinkable just a decade or so ago.
Also, cable has been getting increasingly more expensive,
so much so that many people, especially when presented with viable
alternatives, decide to drop their cable subscription to save some money.
All of this has put the cable industry in grave danger,
and it begs the question: is cable TV dead? On the surface, it might seem this
is the case, but the story is slightly more complicated than that, especially
when we zoom out and take a look at the situation around the world.
Statistics in 2019
To help us determine whether or not cable TV really is
dying, here’s a snapshot of the cable TV industry in 2019:
of Cable in the United States
In the United States, there are around 90 million pay-TV subscribers, which makes it the third-largest cable TV market in the world. The biggest two? China and India.
That these two nations beat
out the US should not be much of a surprise considering the massive populations
of these two countries. However, almost a third of global TV revenue comes from
North America, which includes both Canada and Mexico.
This points to a trend that many of us have already felt
in our wallets and pocketbooks: cable TV in the United States is expensive. If
this weren’t the case, then we would expect China and India to be the leaders
in cable revenue, but this is not the case.
The cost of cable in the
United States has been growing rapidly over the past few decades, and this has
been one of the driving forces behind the exodus from cable. In fact, growth in
price of cable TV has outpaced inflation by 300 percent in the past twenty
years, which has put even a
basic cable subscription out of reach for the average American. And with more
alternatives than ever before, consumers worried about costs are responding by
ditching their cable subscription.
In fact, people in the
United States are ditching cable at a faster rate than any other part of the
world, and in the next five years, America’s share
of the global cable market will drop below 50 percent, a considerable dip for such a short period of time.
However, it’s important to remember this loss of market
share will also come because of growth in other markets, but it still points to
the overall trend in the United States of people dropping their cable
subscriptions in favor of something else.
But we must be wary of taking these numbers as evidence that cable TV will soon be dead. This is because while there was a 32 percent growth in the number of cord-cutters in 2018, this number was down as compared to 2017, which saw a 46 percent increase from the year before.
So, while cord-cutting is certainly a popular trend, it’s tough to tell if it will continue to the point where cable TV ceases to exist. But the cable industry is not seeing this as good news. Most major telecommunications companies are shifting their focus towards internet service as their main business, as sticking to cable at this point presents far too much of a risk.
Why Keep Watching Cable?
Considering the rising cost of cable and the many
alternatives available, it might seem silly that people hang onto their cable
TV subscriptions. But they do, and there must be a reason why this is the case.
In short, the main reason why people keep watching cable
is that it’s the only way for them to access their favorite networks and
television shows. Also, having cable makes it much easier to keep up with your
favorite programs because it puts everything in one place, and it’s difficult
to beat this convenience.
To help show you why cable is still important, consider
the viewership numbers for some of the top cable channels still in existence
These numbers suggest there are still a good number of
people who watch cable TV, but we don’t know anything about loyalty. In other
words, do people pay for cable TV specifically to watch Fox News and MSNBC? Or
do they watch it because they already have a cable subscription and these
channels are simply the best available?
We can only answer these questions as time moves on and we
can further study drop out rates and the reasons why people decide to cut the
Cable TV Demographics
For us to really understand the state of cable, it’s
important to look at who’s actually still watching cable. Here is a breakdown
of cable watchers by age:
As you can see, cable is vastly more popular with older
people, which we can take as a bad sign for the cable industry since it shows
they are struggling to recruit new segments of the market. This is probably
because younger people have grown up with alternatives such as Netflix and Hulu
and are therefore more willing to use them exclusively. Older generations, on
the other hand, have probably had cable their entire lives and are therefore
going to be skeptical, or less motivated, about making a change.
All in all, this paints a bleak picture of the future of the cable TV industry. But it’s not all bad news. Just a little less than half of the people aged 18-37 (46 percent, to be exact) still pay for cable, which we can take as evidence that a good chunk of the population still sees cable to be viable despite the prices and the availability of alternatives.
How Healthy Are the Cable Companies?
The cable TV industry, quite obviously, depends on the
state of the major cable companies. If they suffer, or if they see that cable
TV is becoming a drag on their business, then they could take steps that could
speed up what is currently the slow death of cable.
An analysis of all the cable companies in the United
States would take ages – there are more than 400 – but we can take a look at
the four that control the majority of the cable TV market, which are AT&T,
Comcast, Dish Network, and Charter.
Some of you may be familiar with companies such as Cox,
Verizon, Frontier, and Google Fiber, but collectively, they make up a rather
small segment of the market (their combined market share is only about 13
Here’s a visual snapshot of how the cable companies share
the wealth in the shrinking yet still massive cable TV industry:
With a long history as one of America’s premier
telecommunications companies, AT&T still reigns supreme in the cable TV
world. Part of the reason for this is because of its proprietary service,
U-Verse, but AT&T also has such a large presence because it took over DirecTV in 2015, which at the time
was one of the largest cable TV service providers in the nation.
Yet because of how large AT&T’s presence is, it has experienced some of the most dramatic changes as a result of this cord-cutting trend. To give you an idea, consider that AT&T lost more than half a million subscribers in just the first quarter of 2019.
This loss of subscribers has translated into a loss of revenue for the company, which is a trend that has been occurring over the past few years. This past year, in 2019, AT&T saw a drop in revenue of 1 percent, but cable TV still brings in $11.33 billion a year for the telecommunications giant, suggesting this portion of its business is not going anywhere anytime soon unless of course, the rate of cord-cutting speeds up dramatically.
By virtue of its Xfinity cable service, Comcast is the
second-largest cable TV company in the United States, and it too is
experiencing some troubles as a result of people turning away from cable for
alternatives. However, things aren’t quite as bad for Comcast as they are for
AT&T. More specifically. Comcast is right behind AT&T in terms of the
number of subscribers with 20 million, but in the first quarter of 2019, it only lost 121,000 subscribers as compared to AT&T’s
Part of the reason Comast has been able to stave off some
of this decline is that they operate a virtual monopoly in many parts of the
country. In fact, some 30 million Americans have no other cable TV choice,
meaning they will have Comcast if they choose to have cable. In these
scenarios, people could still cut the cord, but we often look less for
alternatives when we have fewer available to us.
Furthermore, Comcast has been taking some steps to try and curb the cord-cutting tide, such as making partnerships with streaming services such as Roku, which allow it to compete with companies such as Netflix. However, these initiatives are unlikely to solve Comcast’s subscriber loss woes because they offer consumers little in terms of additional value, which pushes people to eventually explore other options.
However, another interesting fact about Comcast is that
despite its losses in the cable TV industry, the company is growing year over year. This is
due largely to its efforts to expand its presence in the internet and mobile
phone markets. It’s possible the company could use this revenue to try and make
up some ground for itself and the cable industry as a whole, but it’s
impossible to tell the direction the company will go in the coming years.
The cable service offered by Charter is called Spectrum
and it currently reaches about 15 million people nationwide. Being third on the
list is not good for Spectrum, though, as it is losing subscribers at an
alarming rate. In the first quarter of 2019, it lost 152,000 customers, which
was an increase from the first quarter of 2018 when it lost 121,000, which
suggests Charter may be in trouble in the years to come. But Charter does offer
internet and phone services, which might help keep it afloat as the cable TV
industry continues to struggle and Charter’s role in it continues to decrease.
Dish Network provides cable TV service through its
proprietary service, known as Dish, as well as its subsidiary, Sling TV.
Between the two, Dish Network has a little more than 12 million subscribers.
But compared to the other major companies in this space, Dish Network is
hemorrhaging customers; it lost more than 250,000 subscribers in Q1 of 2019,
and it has been experiencing a 5 percent decline in yearly
revenue as a result. This means things do not look good for Dish
Network moving forward, especially since the company depends almost exclusively
on its cable TV business.
Assessing the Health of the Cable Companies
Looking at some of the numbers, it appears that we are experiencing a bit of a consolidation in the cable TV industry, which is what we should expect when a market this large shrinks so dramatically. This means that if this cord-cutting trend continues, we will probably see more and more smaller companies fold or sell, and this will give the larger companies more power.
In the past, this would have meant less competition and
higher prices, but with so many alternatives available, this might not happen.
Also, we will have to keep an eye on what the big players in the industry do.
For example, if AT&T and Comcast ramp up their diversification efforts and
invest less in cable, this could accelerate the death of the industry. But in
contrast, renewed investment by these companies driven by their enhanced
position within the market could revive the industry or at least keep it alive
for the foreseeable future. Again, only time can tell.
Cable TV Around the Globe
While the numbers would indicate that the cable TV
industry in the United States is struggling at best and maybe even dying, to be
able to pronounce this the beginning of the end for cable, we need to zoom out
and see what the situation is around the globe.
In general, the trend taking place in the United States
can be seen in other counties, but it’s far from the norm in many other places.
Here’s a look at the situation in different parts of the world:
Unlike the US market, the European cable industry is
actually growing. There are currently 70 million cable TV subscribers across
the continent, which is up from just 25 million in 2010, and it’s expected there will be around 80 million by 2023.
But to say this is a continent-wide phenomenon would be
oversimplifying the situation. To give you an idea, consider that in Germany,
the United Kingdom, Denmark, and Switzerland, people are dropping their cable subscriptions almost as
quickly as they are in the United States. But if you turn to countries such as Spain,
Poland, Russia, and France, as well as the former Eastern Bloc, you will see
that cable TV is growing rather quickly. This is the case, especially in
Eastern Europe, because many of these countries are still considered
“developing” (not Spain and France, two outliers in this group), and this has
given the cable industry more room to grow in recent years.
However, no matter how we validate the numbers, the conclusions surrounding the European cable industry are still the same: things aren’t as bad as in the U.S. However, we should be wary of saying this means cable TV is safe in Europe. The growth of alternatives such as Netflix and other streaming services could dampen these hopes and set cable on the path of non-existence.
Latin America, Asia-Pacific, and Africa
When we turn away from what is traditionally considered
the “developed” nations of the world and focus on emerging markets, the state
of the cable TV industry looks radically different. Cable TV subscriptions are growing faster in Latin America
than anywhere else in the world. Right now, most of this growth is
in Brazil and Mexico, but most analysts predict this trend to spread to the rest of
the region, especially as countries such as Colombia, Peru, Uruguay,
etc. continue to experience economic growth and expanding incomes.
In the Asia-Pacific region, there are currently more than 623 million subscribers,
making this region the largest market in the world in terms of the number of
subscribers. Not surprisingly, the largest market within this segment is China
with around 150 million subscribers. Looking to the future, we can expect
continued growth for cable TV in Asia, as it is right now the most preferred means of content
consumption on the continent. Part of the reason for this might be
some of the restrictions that come from the Chines government. For example,
Chinese residents cannot access Netflix as of writing, leaving them with no
other options other than paid cable TV.
Lastly, the continent of Africa also promises to be an
area of growth for the cable TV industry in the coming years. It’s the fastest-growing continent in terms of population,
and as economies develop and incomes rise, it’s expected there will be more and
more cable subscribers each year. In fact, the number of subscribers is expected to double by 2024,
which would bring the total number of people paying for cable up to 50 million.
Competition is also improving, which should drive prices down and make cable
even more accessible, a change that would theoretically boost the overall
number of subscribers.
Cable TV is not dead in any part of the world. At least not yet. At the moment, given the rapid rate of cord-cutting, we can say it’s begun to die in the United States and some parts of Europe, but it is growing in almost the entire rest of the world.
However, we should be careful about saying this means all
is well for the years to come. It’s possible the growth in internet penetration
will make cable alternatives available to populations around the world much
more quickly than we’ve seen in the past, which could reverse this trend and
lead to the death of cable.
Yet until this happens, it will be interesting to see how
new technologies and more competition reshape one of the largest and most
profitable industries in the entire world.
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