Another day, another study showing video streaming services are realigning the entire entertainment paradigm.
15 of every 100 American adults have cut the cord — cancelled their cable or satellite TV subscription — in recent years, according to Pew Research Center’s Home Broadband 2015 study. An additional 9 of every 100 Americans have never had a cable or satellite TV subscription. In all, nearly a quarter (24 percent) of Americans do not subscribe to pay TV, and the number keeps growing.
The availability of streamers like Netflix, Hulu, and Amazon Prime Instant Video on mobile devices is a big incentive for those who’ve sworn off cable. The 24 percent of cord cutters “rely on a different mix of access tools for digital content, a mix that emphasizes smartphones over a home broadband subscription,” according to the study. 64 percent of those without a cable or satellite TV sub site “alternative access to content” as a reason for being a cord-cutter.
The study backs up recent remarks from Netflix CEO Reed Hastings, who claims the key to the success of traditional media in the mobile age are so called “TV Everywhere” apps, which allow users to watch pay TV on the go. However, for a variety of reasons, Hastings also believes that traditional media companies don’t have what it takes to make TV Everywhere work efficiently. For now, anyway.
“The challenge in the industry is that it’s very fragmented between the cable networks and the distributors, and so it’s really tough to work well together, to extend the ecosystem,” Hastings said.
The report also finds that young adults who largely grew up in the Internet age are least likely to have a cable or satellite subscription. Only 65 percent of young adults between 18 and 29 have a cable or satellite subscription, as compared to 73 percent of adults between 30 and 49, and a whopping 83 percent of adults over 50.
If the cord-cutting trend continues, Hollywood’s future may not be so rosy. “So much of the profits of major media congloms are derived from cable networks that rake in affiliate fees from cable and satellite providers,” explained Variety. The publication further notes that even though Star Wars may be breaking box office records left and right, “Disney’s stock is feeling the pinch of cord-cutting concerns.”
It’s not all doom and gloom for traditional TV services, though. 100 million homes still have pay TV, down just a million from 2014. But if this figure keeps rolling downward, something drastic may be required.