US research firm eMarketer has reduced its estimate for US TV ad spending due to faster-than-expected growth in cord-cutting.
According to Monica Peart, eMarketer’s senior forecasting director: “Traditional TV advertising is slowing even more than expected, as viewers switch their time and attention to the growing list of live streaming and over-the-top [OTT] platforms.”
eMarketer has increased its estimates for cord-cutters substantially for 2017 through 2021. In fact, by 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV (“cord-nevers”).
This year, there will be 22.2 million cord-cutters ages 18 and older, a figure up 33.2% over 2016. The overall tally is much higher than the 15.4 million eMarketer previously predicted. Meanwhile, the number of US adult cord-nevers will grow 5.8% this year to 34.4 million.
“Younger audiences continue to switch to either exclusively watching OTT video or watching them in combination with free TV options,” said Chris Bendtsen, senior forecasting analyst at eMarketer. “Last year, even the Olympics and presidential elections could not prevent younger audiences from abandoning pay TV.”
Overall, 196.3 million US adults will watch pay TV (cable, satellite or telco) this year in the US, down 2.4% over 2016, eMarketer predicts. By 2021, that total will have fallen nearly 10% compared to five years earlier. The number of US pay TV viewers ages 55 and older will continue to rise throughout the forecast period, while every other age group user tallies will decline.
“The acceleration of cord-cutting is the result of several factors,” said eMarketer principal analyst Paul Verna.
“First, traditional pay TV operators are increasingly developing streaming platforms, such as Dish Network’s Sling TV. Second, networks such as HBO and ESPN have launched standalone subscription services that allow users to tap those channels without a cable subscription. And third, digital players like Hulu and YouTube are now delivering live TV channels over the internet at reasonable prices—including sports properties that were previously available only through traditional distribution.”