Cord Cutting Accelerates During 2022

Six big questions re: cord cutting:
1) How many homes subscribe to a pay-TV bundle?
2) What share of pay-TV subscriptions are streaming?
3) How many homes currently subscribe to broadband?
4) Is broadband a better business than pay-TV?
5) Is time spent with cable declining at the same rate as subscribers?
6) What share of available channels do pay-TV subscribers watch?

Setting the table: The chart below shows the HH growth for broadcast, cable, and streaming since 1950.

Big question #1: How many homes subscribe to a pay-TV bundle? Quick answer: 76.0M YoY change in pay-TV subscribers:
1) Traditional pay-TV – ↓ 6.3M
2) Streaming pay-TV – ↑ 1.6M
3) Total pay-TV – ↓ 4.7M 

Total pay-TV subscriptions (YoY growth):
1) 2018 – 92.3M
2) 2019 – 89.1M (↓ 4%)
3) 2020 – 85.6M (↓ 4%)
4) 2021 – 80.7M (↓ 6%)
5) 2022 – 76.0M (↓ 6%)

FYI: Household penetration for pay-TV has fallen to 1993’s level.

Big question #2: What share of pay-TV subscriptions are streaming?

Quick answer: 19%

Streaming pay-TV subscriptions (YoY growth):
1) 2018 – 7.2M
2) 2019 – 9.6M (↑ 33%)
3) 2020 – 12.0M (↑ 25%)
4) 2021 – 12.5M (↑ 4%)
5) 2022 – 14.1M (↑ 12%)

Streaming share of pay-TV subscribers:
1) 2018 – 8%
2) 2019 – 11%
3) 2020 – 14%
4) 2021 – 16%
5) 2022 – 19% 

Share of U.S. TV households by source according to MoffettNathanson:
1) Streaming only – 44%
2) Streaming + Pay-TV – 38%
3) Non-streamer – 18%

Interesting: Colin Dixon at nScreenMedia has a similar chart (includes duplication).

Total U.S. TV households by source according to nScreenMedia:
1) Streaming (subscription) – 106M
2) Traditional pay-TV – 68M
3) Streaming (ad-supported) – 31M
4) Over-the-air – 19M
5) Streaming pay-TV – 15M

Traditional pay-TV subscriptions (YoY growth):
1) 2018 – 85.1M
2) 2019 – 79.5M (↓ 7%)
3) 2020 – 73.6M (↓ 7%)
4) 2021 – 68.2M (↓ 7%)
5) 2022 – 61.9M (↓ 9%)

Big question #3: How many homes currently subscribe to broadband?

Total broadband subscriptions (YoY growth) according to Leichtman Research Group:
1) 2019 – 101.2M
2) 2020 – 105.8M (↑ 5%)
3) 2021 – 108.4M (↑ 2%)
4) 2022 – 107.4M (↓ 1%)

Big question #4: Is broadband a better business than pay-TV?

Quick answer: Yes.  In 2022-Q3, Comcast/Charter generated $1.21 in broadband revenue for every $1.00 in pay-TV revenue.

Big question #5: Is time spent with cable declining at the same rate as subscribers?

Quick answer: Yes.  Time spent w/ cable TV declined ≈ 3X as fast as subscribers.

Why this matters: Consumers who watched low amounts of cable TV were obvious early targets for cord-cutting.  Now consumers who watch an above-average amount of cable TV are cutting the cord.

Quote from Troy Young – Adviser/Investor + Former Global President @ Hearst Magazines:“And because you are too busy looking at screens everywhere, except the screen you used to always look at, cable television, you already realize that the end is coming quicker than we may have thought. Unless you watch NFL but that will only sustain you for so long. Even Bob Iger admits that the end is fast approaching.”

Big question #6: What share of available channels do pay-TV subscribers watch?

Quick answer: < 8%

Share of cable channels watched by subscribers according to Nielsen:
1) 1995 – 25%
2) 2005 – 16%
3) 2015 – 8%

Why this matters: Pay-TV bundles become bloated with networks many people never watch but still pay for.

Three waves of disruption for the pay-TV ecosystem, according to Matthew Ball:
1) Wave #1 (2007 – 2015) – Pay-TV is getting better but too expensive. Better value substitutes emerge

2) Wave #2 (2015 – 2019) – Pay-TV is still getting better, plus cheaper. Better value substitutes are getting better

3) Wave #3 (2019 – Present) – Pay-TV is getting worse and more expensive. Suppliers focused on better value substitutes

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