First, here is some bad news: Last quarter’s cord cutting statistics are finally in, and they are not pretty.
Comcast, for instance, lost 125,000 video subscribers last quarter. And Charter’s pay TV subscribers dipped by 105,000. Cord cutting, in other words, is continuing to ravage the television industry and it’s not getting any better.
By the end of 2017, for instance, it is expected that 22 million U.S. adults will cancel their cable packages — a figure that is much higher than analysts had previously thought.
As we have been saying right along, though, there is little reason to fear the cord cutting apocalypse that industry experts have long predicted. And broadband is a major reason why. It’s possible, in other words, to keep generating revenue from consumers who abandon their cable TV packages — if they stay on board as broadband subscribers.
In fact, in one encouraging study, more than half of U.S. broadband households now subscribe to both a pay TV service and at least one over-the-top streaming service.
“Many OTT services are evolving to be complementary to the market’s largest players, instead of trying to compete directly against Netflix, Amazon, and Hulu,” stated Brett Sappington, senior director of research at Parks Associates. “Also, consumers are increasingly self-aggregating their OTT and entertainment services — they are adopting primary entertainment content sources and supplementing those sources with complementary video options.”
So as you can see, pay TV and OTT content can complement each other nicely. And just because a customer cuts his or her cord, it doesn’t mean that customer is forever abandoning cable. So it’s important to remain optimistic despite the troubling statistics.
Many customers, for instance, only want cable during their preferred sports seasons. And on the flip side, many customers only want OTT channels when their favorite shows are premiering.
Looking to the future, we are staring at a marketplace that is much more consumer-centric—and where services are split between cable and OTT offerings.
For cable providers, now is the time to reflect on all of the services being offered and to consider making important changes that can increase flexibility. The name of the game right now is to find ways to keep customers coming back and spending money on your company—and lightning-fast, and high quality broadband is arguably the best service to do this.
Cable companies that can reinvent themselves stand a much better chance of surviving over the course of the next decade, and beyond. Meanwhile, businesses that remain stuck in their ways will get steamrolled by the competition.
So, how are you preparing for the future? We want to hear your comments!