14 Fascinating Cord Cutting Statistics in 2020

Posted under: Blog, Internet and Television

Ever since the television became a fixture in middle-class homes starting in the 1950s and 1960s, TV has been an integral part of American culture. While rabbit ear antennae eventually gave way to cable and satellite subscriptions that provided more and more content and better quality, not a lot changed in the past half-century.

However, in the past 15 years, change has defined the industry. The rise of the internet and streaming services has given people a lot of alternatives. Considering that the cost of cable has been steadily rising over the years, people are increasingly saying goodbye to cable, a trend known as cutting the cord.

But just how widespread is this phenomenon? As it turns out, it has become a major driver of change in the entertainment industry, and things are likely not going to change anytime soon. To demonstrate this, we've compiled 14 of the most interesting cord cutting statistics we could find related to cord cutting.

Price of Cable vs. Inflation

What is Cord Cutting?

Someone becomes a cord cutter when they decide to drop their cable TV subscription in favor of an alternative. The term comes from the act of removing the physical cord, or "cable", from your home, although cord cutters still rely on a cord in some form or another.

Cord cutting can also include dropping your home phone service, but this is something you do in addition to dropping cable.

In general, when people cut the cord, they opt for one of two alternatives:

·         Over the Air (OTA) Broadcasts - These cord cutters turn back the clock a bit and choose to get their TV through an antenna. Thought that technology was dead? Think again! It's still very much alive, and as cable gets more and more expensive and people look for alternatives, antennae are making a comeback. However, this remains the less popular alternative to a paid cable TV subscription or the other option, streaming.

·         Over the Top (OTT) Broadcasts - This is the far more common version of cord cutting. It refers to when people ditch cable in favor of alternatives that function over the internet, mainly to streaming services such as Netflix, Hulu, Amazon Prime, etc. It can also refer to live TV alternatives such as YouTube TV, Sling TV, Hulu Live, etc. To get access to all the content that's available on the web, you would need to spend more than most people spend on cable, but most people choose a few, share a few others, and make do without whatever they're missing. The abundance of cable alternatives is a big reason why so many people are cutting the cord.

OTT broadcasts are more popular because they dramatically improve the TV watching experience, something OTA broadcasts don't do, despite being the cheaper option.

Either way, the rising cost of cable and its perceived drop in value is disrupting a market that has been a stronghold in the entertainment industry for as long as most of us can remember.

Key Cord Cutting Statistics in 2020

Now that we're clear on precisely what cord cutting is, let's dig into some fascinating statistics that point to just how strong this trend is and just how much potential it has to revolutionize the way we consume television.

In 2019, 6.3 million people cut the cord

This brought the total up to 39.3 million, an 18.9 percent increase over the year before. The number of cord cutters continues to rise every year, although the rate of change is slowing down. To give you an idea, from 2017-2018, the number of cord cutters grew by 32.8 percent.

Over the next few years, the number of people cutting the cord is expected to grow, but as that number gets bigger, the year-over-year change will get smaller.

Also, there is still a good block of people who remain faithful to their cable subscription. The big question is if these loyalists will be enough to keep the industry alive, or if the damages these companies will incur will be too big for them to handle.

Number of Cord Cutters in The U.S.

There Will Be More than 55 Million Cord Cutters By 2022

Even as the year-over-year increase in the number of cord cutters slows down, we can still expect there to by around 55 million cord cutters in the United States by 2022, just two years from now. That's an additional 15 million as compared to the number of cord cutters there currently are, a statistic that suggests this trend is in no way shape or form slowing down any time soon.

Cable TV Penetration Will Fall to Below 60 Percent By 2030

Cable TV penetration rates refer to the percentage of homes in the United States that have cable. Currently, despite all of the cord cutting that has been going on, that number is around 81 percent, but it's expected to drop significantly in the next decade to around 55 percent.

Think about that for a moment - in just ten years, there will be a 50/50 chance that a home you walk into will have cable. Perhaps some of you remember growing up and complaining every time mom and dad sent you to your grandparents with the phrase, "But they don't even have cable!"

This is rapidly becoming the norm, although it's a bit different since people without cable usually have one or more streaming services to cover their entertainment needs.

35 Million Americans Have Never Had Cable

To be considered a cord cutter, you first need to have a cable subscription and then cancel it. However, in the United States, some 35 million people have never had a single cable subscription.

Most of these people are young people, either in college or just out of it. Maybe they had cable growing up because they're parents had it, but they have grown up with streaming. Once on their own and faced with the prospect of paying their own bills, many of these individuals skip right over cable and stick with a streaming-only approach, another way of saying they are cord cutters.

This is a troubling trend for the cable industry. It suggests that younger people don't even really consider it an option, something that will make it rather difficult for companies to recruit new customers.

Netflix Has More Viewers than Cable and Satellite Combined

Although cable is still in the lead in terms of the number of subscribers, when it comes to viewers, Netflix is officially in the lead. For cable companies, this is more bad good news, as it means there are lots of people out there watching Netflix more than they are watching cable, and it's only a matter of time before they realize they are paying for a service that they don't really use.

What's even worse for the cable companies is that this number doesn't include the number of viewers from other streaming services. If we could add all these up, cable would be losing quite badly to the streaming world in terms of number of viewers. And if in some future people can access live TV and other events from somewhere other than cable, then we may be looking at the death of the cable industry, something that seemed practically impossible just a few years ago.

69 percent of People Have a Streaming Service

The vast majority of people now have some sort of streaming service. As more and more of them come online, we can expect this number to continue to grow, ramping up the competition for cable companies and making it even more difficult for them to survive.

This stat is even more concerning for cable companies when we consider how many live TV options are now available "over the top." Platforms such as YouTube TV, Hulu TV, Sling TV, and more make it easy for viewers to get access to the live programming once exclusive to cable. As the number of subscribers to these services continues to rise, we can expect the number of subscribers to cable TV to continue to plummet.

Cable TV Ratings from Viewers Aged 18-49 Are Down 11 Percent

People who fall into the 18-49 age bracket are the ones that cable companies care the most about; they are the most active consumers, and most likely to respond to ads for new products. Since advertising is how the networks that make cable possible earn money, that so many people from this bracket are turning away from cable is quite troubling news for cable companies.

Overall, ratings for cable TV amongst viewers aged 18-49 are down 11 percent from last year and 27 percent over the past two years. There is no evidence to suggest this trend will reverse as more and more young people turn to alternative sources, suggesting the cable companies are losing their key demographic. This does not bode well for the industry.

Nearly One-Third of People Over 50 Have Dropped Their Cable Subscription

This should concern cable companies quite a bit, as people over 50 should be the ones most willing to stick with cable. However, the numbers suggest that even those over 50 are slowly getting fed up with the rising costs and somewhat shady practices of cable companies.

Plus, people in this age bracket are no longer scared away by technology, which may have been the case a few years ago when the digital revolution was still new. For proof, consider that around two-thirds, 61 percent, to be exact, of people over 50 now rely on TV content from online sources, mainly streaming. This represents an increase of 27 percent over the past few years, which shows that cable companies are losing ground with what was once one of their most loyal market segments.

Why Do People Cut the Cord?

As you can see, people are cutting the cord in droves, but what exactly is driving this trend? Some of the motivations are obvious, but others not so much. Here's a breakdown of some of the main reasons why people are cutting the cord:

Why People Cut The Cord

The Number One Reason People Cut the Cord is Price

If you currently have cable or recently had it, you're probably aware that the price of your subscription has gotten, shall we say, out of control. The average person pays around $107 per month for a subscription, and the price has been going up steadily. In fact, it has been steadily outpacing inflation for the past 20 years.

Therefore it should be no surprise that 86.7 percent of cord cutters cite price as the top factor that eventually drove them to cut the cord.

In the coming months and years, it will be interesting to monitor this trend. At the moment, we have just a few streaming services to choose from, but this is changing all the time as more and more companies get into the streaming game. If a moment arises where we need to subscribe to ten streaming services at $15 each to keep up with the latest in TV, then cutting the cord will no longer be economical.

For the moment, the desire to save money is driving the vast majority of cord cutters to once and for all say goodbye to their cable subscription.

Just 34 Percent of People Are Happy With Value They Receive From Their Subscription

No one likes to spend a lot of money, but if we do it, it's nice to know we're getting a good value in return for the money we're spending. With cable subscriptions, though, this simply isn't the case. Rising prices have not translated into higher value, and most people look at their cable TV lineups and see hundreds of channels they don't watch yet are forced to pay for. This is obviously frustrating and has been a major reason why people have decided to cut the cord.

40 Percent of Cord Cutters Do So Because of Streaming

The next primary reason people cut the cord is that they prefer to use a streaming service, mainly Netflix, Hulu, Amazon Video, etc., regardless of price. Overall, just under half "40 percent" of cord cutters listed a preference for streaming as their main motivation.

There are two main reasons for this. First, streaming services typically don't have ads (the cheapest version of Hulu being the exception). When we watch cable, we are subjected to countless advertisements, and for some people, it's just too much. The losses we incur by dropping cable (live TV and sports) is a small price to pay.

The other big reason is convenience. With streaming, you can watch your favorite shows at any time. In most cases, you can even download content to watch it offline, which is a great feature for those who spend a good bit of time on-the-go, either traveling or commuting. This is something you simply don't get with cable, and it's a big reason why people choose to get rid of cable and stick exclusively to streaming.

A Quarter of Cord Cutters Have Opted for Free TV

Interestingly, around a quarter - 23 percent - decided to cut the cord because they wanted to go for entirely free TV using an antenna. Most of us probably thought that antenna TV was gone forever, but this is far from the truth. In fact, for casual viewers, this is truly a great option.

All you need to do is spend $50-$200 for an antenna, hook it up, point it in the direction of the signal you want, and boom! Free TV for life. Of course, you get far fewer channels (although in some areas you can get up to 50), and you sacrifice the ability to record shows and take them with you. But you do get access to local programming and live sports/events.

In this sense, it's a great happy medium, and when people learn about it, they often choose it as their primary alternative to a paid cable subscription.

Original Programming is Not a Key Driver of Cord Cutting

Although streaming companies such as Netflix, Hulu, and Disney Plus are pouring money into their original programming to make themselves more attractive alternatives, this is actually not a major reason why people choose to drop cable and rely on streaming.

More specifically, just 7 percent of people said they chose to cut the cord because most of what they watch on TV is original content from a streaming service.

However, as these services continue to invest in content, this may change. Original series on these platforms are already becoming quite mainstream, and in recent years they have begun receiving recognition from critics and awards organizations. As a result, you may start to see more people switching over because they don't want to miss out on the new shows these platforms are putting out. But at the moment, this is not a significant driver of cord cutting.

52 Percent of Cord Cutters Say They Don't Miss a Thing About It

What does cable have over streaming services? Traditionally, live sports and local programming, and cable companies have been banking on the idea that people would miss these two things so much that they would stick with cable even as more and more alternatives become available to them.

Overall, 23 percent of cord cutters say they do miss live events, and 22 percent say they miss local/national news. However, more than half, 52 percent, say they don't miss anything at all.

Of course, this number is taken from cord cutters, people who may have already not had much interest in these things. What this suggests is that when people cut the cord, they don't really look back. This means cable companies should be prepared to say goodbye forever to those who decide to drop their service in favor of alternatives.

Is Cable TV Dead?

After reading all of these fascinating statistics, you might be wondering: is cable TV dead? Well, that's a difficult question to answer. The numbers we've presented here certainly give that impression, but there are other factors to consider:

·         Growth in other parts of the world - Cable TV is struggling in Western Europe and North America, but it's growing in Eastern Europe, Asia, Africa, and Latin America. In other words, everywhere else. Of course, this growth is not being experienced by the same companies that operate in Europe and the US, so these companies, or many of them, may die, but cable TV as a medium probably isn't going anywhere anytime soon.

·         Service bundles - One thing that certainly isn't going anywhere is the internet. At the moment, cable companies are also the top internet service providers, and cable internet continues to be one of the most reliable and widespread forms of high-speed internet. To entice people to stick with cable, these companies often offer bundle deals with internet that are hard to turn away. As long as this is the case, people may continue to subscribe to cable even if they don't watch it much. It's also possible that cable companies will use their position in the broadband market to somehow revive cable.

·         Exclusive content - Another thing that might keep cable alive is that there is a good deal of content exclusive to cable. Whether or not this is enough to convince a large enough group of people to ditch cable in favor of streaming completely remains to be seen, but it's something keeping the industry alive.

For these reasons, it's unlikely we will see the complete and total death of cable in the coming years. However, it's clear that the industry must brace for continued losses and substantial changes. The numbers we've provided you with here today help show just how big this trend has become and demonstrate the trouble in which cable companies currently find themselves. Will they turn it around? Only time will tell!