Why 2021 could be the beginning of the end for cable TV

Wait. Yet another op-ed crowing about the death of cable TV? Haven’t we heard this like a million times before? Yes, it’s true: Digital Trends, along with virtually every other publication and pundit that observes technology has been making this prediction on a regular basis for years. But here and now, in 2021, the end of cable has a deeper feeling of inevitability than ever before. Here’s why.

The pandemic, which began in earnest one year ago, has forced many of us to rethink how we live our day-to-day lives. Those of us who have been fortunate enough to remain employed have had to rethink how we work, parents and caregivers have had to rethink how to manage their children’s education, and we’ve all been forced to drastically rethink how we entertain ourselves.

This COVID-19-induced soul-searching has had profound effects across the board, but for the traditional world of pay TV via cable and satellite, it’s been nothing less than a perfect storm. Subscribers have been abandoning these platforms for streaming alternatives at a record rate.

The numbers from 2020 were staggering. Verizon Fios Video lost 300,000 customers in 2020. AT&T’s subscriber base is down 16% from 2019. Comcast lost 1.3 million pay-TV subscribers. All told, more than 6 million U.S. households cut the cord.

Too expensive

You might think that as Americans were forced to entertain themselves at home, their appreciation of their pay-TV subscriptions would increase. But clearly, the opposite has happened — and it’s not hard to understand why.

Cable and satellite television are just too expensive. That was the number one response from a recent study by Parks Associates that explored the reasons people had for ditching their traditional TV providers over the past 12 months.

But money wasn’t the only reason. Respondents said that certain features they valued could only be found on streaming services, and many said that they switched for specific shows and channels that they couldn’t get through cable or satellite. Conversely, those who had switched often complained that their previous provider forced them to pay for too many channels they simply never watched.

And if 6 million lost subscribers sounds bad, that’s just the start. Parks and Associates predicts that 43% of all broadband households in the U.S. that are still paying for cable or satellite TV will switch to streaming services within the next 12 months.

American businesses believe these predictions too. In October 2020, CNBC reported that at least three large U.S. media companies expect about 25 million U.S. households to cancel their pay-TV subscriptions over the next five years. That would be the same number of cancellations in a five-year period that the industry saw over the preceding 10 years.

Other factors

In the past, pay-TV players could count on major networks to keep folks locked into their packages. It wasn’t that long ago that the big four broadcasters — ABC, CBS, NBC, and Fox — could only be accessed via cable, satellite, or terrestrial antenna. But lately, live TV streaming services such as Hulu + Live TV, YouTube TV, and FuboTV, which the industry refers to as Virtual Multichannel Video Programming Distributors (vMVPDs), have closed that gap.

Along with networks came major sports events, which were another reason to choose cable. But this year’s Super Bowl, which is being televised by CBS, will be available on a wide variety of streaming platforms, many of which are offering it free to anyone with an internet connection.

Satellite TV operators have enjoyed an easy ride to date within the rural communities they serve because high-speed internet is often nonexistent in these locations. But this too is primed for rapid change. At the end of 2020, Elon Musk’s SpaceX received a 10-year, $885 million commitment from the federal government for its Starlink constellation of broadband satellites. Musk claims that the service, which is currently being beta-tested in the U.S., will offer speeds of up to 150Mbps, for about $100 per month. Starlink’s deployment plans will eventually give it enough coverage to deliver the same service globally.

By now, most folks know that on-demand streaming services like Netflix, Amazon Prime Video, and Disney+ offer some outstanding content that you can’t get on regular pay TV. But as 2021 sees a further increase in the adoption of advanced TVs with 4K resolution and high dynamic range (HDR), there will be yet another reason for folks to ditch cable and satellite TV. Right now, 4K broadcasts are still a rarity on these platforms, as is HDR. But virtually all of the top content from on-demand streamers exists in these formats and many feature advanced surround sound like Dolby Atmos, too.

So while we don’t expect cable and satellite TV to be completely extinct by 2022, we think that when we all look back five or six years from now, 2021 will be seen as the year these services passed the point of no return.

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