A new report by Convergence Consulting won't comfort cable industry executives that are losing sleep over cord cutting. According to the firm's latest The Battle for the North American (US/Canada) Couch Potato reports, the traditional pay TV sector lost 1.131 million subscribers last year, after losing just 283,000 in 2014. That would appear to put to bed the industry narrative that last quarter's slight cable gains means that cord cutting's on the run.
According to the firm's analysis, there were an estimated 24.6 million US households (or about 20.4% of all households) that don't have a traditional pay TV subscription. That's an increase from 22.5 million (or about 18.8% of all households) at the end of 2014. Given the growth of alternative streaming options, Convergence predicts that number will rise to 26.7 million (21.9% of households) by the end of 2016.
"2014 saw 1.27 million, 2015 2.1 million, and we forecast 2.08 million 2016 cord cutter/never household additions," the firm notes.
"We think the jump from 2014 to 2015 in terms of TV subscriber losses and (the industry) losing 1.1 million subscribers per annum going forward being the new normal is a big deal," Convergence's Brahm Eiley tells me via e-mail. "Linear TV still has feet left in it but the chipping away process has begun."
The good news? No matter how people are consuming media, everybody in the chain -- from traditional cable companies to streaming operators, are making more money than ever before.
"We estimate US Cable, Satellite, Telco TV access revenue grew 3% to $105 billion in 2015 and forecast $107 billion for 2016," notes the firm. "In contrast, we estimate US over the top access revenue (from CBS, HBO, Hulu, Lifetime, Netflix, Noggin, PlayStation, Seeso, Showtime, Sling, Starz, Tribeca) grew 29% to $5.1 billion in 2015 and we forecast $6.7 billion for 2016."