Survey: 5.4 Million Americans Will Cut The Cable TV Cord In 2018

The rise of cord cutting shows no sign of slowing down. As cable providers continue to raise prices yet refuse to seriously address their dismal customer service, nasty billing fraud problems and skyrocketing prices, more users than ever are flocking to a new variety of cheaper, more flexible streaming alternatives. Some cablecos have attempted to get out ahead of this trend by offering their own competing services (AT&T's DirecTV Now, Dish Network's Sling TV), but most traditional cable providers seem intent on just doubling down on the same bad ideas that started the cord cutting trend in the first place.

The result is an obvious one. A new report indicates that more than 5.4 million cable TV subscribers are expected to cut the cord this year, resulting in a $5.5 billion loss in revenue for traditional cable TV providers like AT&T, Comcast, Charter and Verizon. That hit comes in comparison to the 4.8 million traditional pay TV subscribers lost in 2017, and the 3.8 million lost in 2016. It's all thanks to this mysterious thing known as competition:

"As the process of finding alternative paths to content gets easier and easier, people are acting on the frustrations they have with traditional providers and leaving," the study's lead author and cg42 managing partner Stephen Beck told MarketWatch."

Charts from the full study, which is stuck behind a $2,000 paywall, lays things out pretty clearly for companies like Comcast:

Remember of course, that this is a trend that cable and broadcaster execs spent years claiming either wasn't real, or didn't matter because things would auto-correct once Millennials started procreating. That incredible denial was in turn propped up by industry metric organizations like Nielsen, which were happy to tell industry executives precisely what they wanted to hear (that this was a trend that would be easily reversible without having to oh, actually do all that much). As the report notes, that head in the sand approach isn't really paying dividends:

"Accelerating the cord-cutting trend is a lack of brand loyalty borne out of frustration, said Beck. Survey respondents were asked to rank their top frustrations by pay-TV provider. Beck found customers were most frustrated with being unable to get what they considered competitive or "reasonable" rates, new customers getting better deals than existing ones and being "nickeled and dimed" with multiple fees and charges.

Based on the survey data and information from public filings, cg42 predicts Comcast will lose 7.2% of its 21.3 million subscribers in 2018, a potential financial loss of $1.6 billion for the company. The firm also predicts AT&T's DirecTV will lose 4.8% of their 24 million customers and a potential $1.2 billion.

These days, most executives do tend to acknowledge the trend is real (it's pretty hard to ignore at this point), but they still aren't particularly keen on actually doing anything about it. They're stuck between a rock and a hard place: denying the trend is real and refusing to compete on price will simply accelerate defections. But buckling to demand, shoring up customer service, and offering less expensive, more flexible channel bundles will hurt revenues. That said, it still makes more sense to be ahead of a trend with a quality offering in the field, than playing catching up with streaming alternatives that have slowly built a solid brand following.

A big reason for this apathy among many industry giants is they know they have an ace in the hole: their monopoly over broadband. As TV revenues sag, providers are simply turning to price hikes, usage caps and overage fees (aka, even more arbitrary and unnecessary price hikes) in order to make cutting the cord and streaming as expensive as possible. And, thanks to napping regulators, the death of net neutrality, an apathetic, cash-compromised Congress, and a lack of real broadband competition in countless markets nationwide, not much is going to be done about it.