Watching TV

Is cord-cutting slowing down?

New research says fewer people ditched cable in 2015 than in previous years. But this may not be the sign of a turnaround TV execs are hoping for.
March 15, 2016

After years of watching their subscriber base give way to a generation of cord cutters, 2015 brought welcome news for cable companies.  A new study by Monteray, CA-based research group SNL Kagan found that last year marked the best year in subscriber retention rates since 2007.

But, research analyst Tony Lenoir cautioned, that’s not necessarily a sign that things are on the upswing for traditional cable. Rather, he said, it could just be a case of the “dead cat bounce” — a colorful term referring to a small, momentary rebound in performance that never leads to a full recovery.

“Even if there’s not panic, there’s no denying at this point that multi-channel (cable) subscriptions are going down,” said Lenoir in an interview with StreamDaily. “The question now is, what can the industry learn from this?”

It found that the “strong” year for cable in 2015 meant that the loss was not as staggering as it has been in recent years. According to SNL Kagan, companies that operate two or more cable TV systems lost 599,000 total customers in the U.S. last year.  It was the industry’s first drop of less than one million in seven years when, in 2007, the industry lost 458,000 customers.

Satellite subscriptions have also continued on a downward trajectory, shedding 478,000 subscribers in 2015 (by year-end 2015, approximately . In 2014, satellite subscriptions were down by just 39,000.

SNL Kagan estimates that combined, satellite and telecommunications companies lost more than one million video (cable and satellite, but not internet) customers in 2015, and the decline last year was more than four times that in 2014, marking the third consecutive overall annual drop in the industry. That said, the final quarter of 2015 showed a less drastic decline (only 15,000 customers were lost over that period). Lenoir said early observations of 2016 showed a similar pattern, but it was too early to reach any conclusions.

According to Lenoir, there’s also been a rise in the last year in the number of “broadband-only” homes, where residents don’t subscribe to cable or satellite at all.

He said the rising prevalence of SVOD is almost certainly influencing cord-cutting habits.

“A lot of people find having Netflix, Hulu or Amazon Prime — or any combination of the three — is enough to suit their needs,” he said. “When you add in YouTube videos and rental (transactional) services like iTunes… it’s not just that they suit their needs, they’ve generated new viewing habits.”

One of the biggest new viewing habits, said Lenoir, is the an increased need for “on-demand” content.

“People no longer want to wait,” he said. “They no longer find ‘appointment TV’ appealing. And it’s a vicious cycle. The more OTT services you get, the more you’ll want, (and) the less appointment TV is going to appeal to you.”

The survey looked at subscriber data from more than 30 U.S. cable operators.

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