How a Surge of Streaming Services Killed Cable
That 2022 and 2023 have been years to watch in streaming is an understatement. With platforms rebranding and bundling and some streaming studios spending recording-breaking amounts on content, this era has been shaping up to be the one that changes how and what we watch.
However, this year will also mark a tipping point for the average American television viewer. According to a report from Samba TV, “cord cutters” now make up the majority of television viewership, with cable and satellite television subscribers comprising only 48% of overall viewership. That means for the first time, 52% of people are choosing to stream their tv instead of subscribing to cable.
In addition, according to Nielsen, both Netflix and Amazon Prime Video captured the most significant portion of the television viewing audience.
So, how’d we get here?
What caused a decade of unprecedented streaming growth?
Two factors are the driving forces that helped to catapult streaming’s growth – faster internet speeds and overall dissatisfaction with cable providers.
With the internet speeding up significantly, streamers could suddenly offer viewers high-quality streaming experiences without pesky pauses or freezing up. As for cable providers, Americans felt they were getting less bang for their buck, with cable bills continuing to climb because of add-ons and fees.
The beginning of original content streaming
Fun fact: In 2010, there were only three streaming services, and those three platforms were Netflix, Amazon Prime Video, and Hulu. By 2013, each of those services would make its first foray into original content with titles including:
- Hulu: Battleground
- Netflix: House of Cards and Orange is the New Black
- Amazon Prime: Betas, Alpha House, Annedroids
Since then, all major platforms, including HBO Max, Disney+, and Paramount+, have been churning out original content. In addition, traditional cable and broadcast channels like NBC and AMC also created their platforms with original content in Peacock and AMC+. However, these are only a tiny fraction of the streaming platforms available to viewers today. In fact, to date, over 200+ streaming services are operating globally, offering a mix of original and licensed content. So there is something out there for everyone that has suddenly made cable feel strangely obsolete, rigid even, in its offering, and therefore American viewing public has now decided to “cut the cord.”
The number of streaming services in 2010 compared to 2023.
As streaming surges, more people are cutting the cord
With so many options now available, it’s plausible that viewers can curate and enhance their watching experience by cutting the cord. No longer beholden to a set of channels with scheduled televised programming, viewers can choose what to watch and when to watch it. However, the question of where to watch still presents its problems.
According to a report from Samba TV, the average viewer in 2023 subscribes to at least two streaming services, one of them being Netflix, which carries 7.3% of overall television viewers. Surprisingly, Hulu ranks second with 3.3%, followed by Amazon Prime at 2.9%. Disney+ and HBO Max round out the bottom of the top 5 with just over 1%.
Regarding additional subscriptions, viewers often cycle through month-long subscriptions, signing up only to binge-watch a top-rated series. For example, HBO Max saw increased subscribers for The White Lotus – season one captured the cultural zeitgeist, and viewers waited to subscribe to HBO Max to binge the entire second season. The same happened at Paramount+, with viewers subscribing to Tyler Sheridan-helmed content like Tulsa King and Yellowstone prequel 1923 only to binge the season and unsubscribe once finished. Of course, the subscribers will likely sign up again once a new season is released, but only for the purpose of binge-watching and then unsubscribing.
Deloitte found a whopping 44% of streaming customers churn, with millennials making up the most significant part of that group.
The average cost of a basic cable plan is around $60 per month, although many cable providers attach add-ons for programming that can add to the monthly fee. Therefore, one could make the case that to save money. Viewers could cut cable from their budgets and rely on streaming services costing between $10 and $15/month. However, because there is so much to watch and so much of it is spread across so many platforms, an average household could be looking at similar costs for streaming depending on the number of services and which tiers of said services they subscribe to.
So who’s still watching cable?
Older Americans typically make up the households holding out. It’s now likely that many younger viewers may not even have televisions, preferring to stream on laptops or mobile devices. As to why older Americans will keep cable – it’s easy – cable and broadcast television is still the most reliable source for local news and sporting events.
How fast is the streaming industry growing?
It’s understandable to see why people cut the cord. The streaming industry is growing. In fact, from September to December of 2022, the number of households with video streaming rose by 2.5 million, reaching a total of 115.6M households. The average household now subscribes to 5.4 streaming services, up from 5.2 in less than a year’s time.
Which is the fastest-growing streaming service?
While Netflix is still king with 231 million subscribers, according to Kantar, paid, ad-supported VOD services including Disney+ Basic and Netflix Basic make up the fastest-growing category in streaming, with 33% growth from 2021 to 2022.
Streaming is the future of tv
Now, more than ever, consumers have more options for what they want to watch. But, unfortunately, finding what to watch is more complicated than ever. Between keeping track of which platform a show is on and for how long, viewers can lose track of content.
Reelgood is solving this problem. We’re making streaming easier by allowing viewers to track tv shows and where they are. We think we’re making streaming smarter and will continue to help viewers save time and enjoy what they watch more, regardless of how many new platforms arise in the next decade.
