The Reason Cable TV and Dish Are Destined For Death (Or Close To It)

June 23, 2021 Topic: Cable Blog Brand: Techland Tags: CableStreamingTVConsumer ElectronicsDigital Media

The Reason Cable TV and Dish Are Destined For Death (Or Close To It)

The research firm eMarketer has released a new report showing the changes in the economics of digital video, with revenue flowing especially towards Netflix, Disney, and YouTube.


The research firm eMarketer has released a new report showing the changes in the economics of digital video, with revenue flowing especially towards Netflix, Disney, and YouTube.

The report, titled “Q1 2021 Digital Video Trends: Netflix, Disney, and YouTube Collect Most OTT Subscription Revenues,” found that in 2021, Netflix will take in 30.8 percent of subscription video revenue in the U.S., followed by Disney with 25.9 percent, YouTube with 13.2 percent, and “other” with 30.7 percent.


Disney owns Disney+, ESPN+, and a controlling stake in Hulu. Google owns YouTube.

Perhaps unsurprisingly, due to the stiffening competition, Netflix has had less of the subscription streaming market over time. It had 44.4 percent in 2019 — the year Disney+ launched in November — 36.2 percent in 2020 and is projected to drop again to 28.4 percent in 2022.

However, some of the highest-growing services will include free ones. The Roku Channel will have 57.2 million viewers per month this year, while Pluto TV will have 46.6 million and Tubi will have 44.4 million.

Also unsurprisingly, viewing time on streaming is expected to decrease in 2021, following 2020 in which most Americans were stuck inside for months at a time.

“After receiving a pandemic-driven viewing bump last year, the amount of time that US adults spend watching linear TV will decrease by 7.0% this year to an average of 199 minutes per day,” the eMarketer study said.

Of course, much of that revenue will come at the expense of cable, satellite, and other traditional pay outlets.

“Traditional pay-TV categories—cable, satellite, telecom— will continue to witness declining subscription revenues throughout our forecast period. Satellite will have the biggest decline in 2021, with a drop of more than $2 billion. This downturn will be driven by the ongoing subscriber losses that have plagued pay-TV providers in recent years.”

The survey saw cable TV revenue dropping, although not by a catastrophic degree. The industry had $47.88 billion in revenue in 2018, $47.40 billion in 2019, $44.16 billion in 2020, with $42.08 billion projected for this year. Telecom video revenues, meanwhile, have dropped from $8.82 billion in 2018 to a projected $7.72 billion this year.

“Streaming video services were one of few business sectors to expand during the pandemic. This is because viewers spent more time with streaming services as they were stuck at home for prolonged periods of time. Additionally, the pandemic reduced people’s disposable income, which contributed to a record year in cord-cutting,” the report said.

eMarketer did predict growth, however, in revenue for the virtual multichannel video programming distributor (vMVPD) category.

“vMVPD subscription revenues will be $9.08 billion in 2021 and grow to $11.01 billion by the end of 2022,” the report said.

The eMarketer report also looked at advertising, and how advertisers are expected to approach the new streaming paradigm.

A survey of U.S. ad agencies and marketers asked where they plan to spend money in 2021. Of those asked, sixty percent said linear TV, thirty-seven percent answered digital display, eleven percent each print, digital out-of-home, and traditional out-of-home, and eight percent on digital audio. Respondents could give more than one answer.

“The growth of Pluto TV’s ad business is reflective of how advertisers are funneling more money toward streaming video,” eMarketer said. “In a December 2020 survey from Advertiser Perceptions cited by Next TV, forty-two percent of US agency and marketing professionals said they would increase ad spending directed to Over-the-Top (OTT) streaming services over the next twelve months, while just two percent planned to decrease it. Most respondents, fifty-six percent, said their OTT ad spending would remain about the same as last year.”

The survey also looked at changes in how much time viewers spent watching digital video.

“Digital video is a broad category that spans various devices and types of content. The so-called streaming wars relate to a subcategory of digital video—OTT,” eMarketer said. “In 2020, people stuck at home for long periods turned to video streaming services to pass the time, which drove a 33.9% YoY increase in the amount of time that US adults spent with OTT per day. After last year’s heightened level of viewing, time spent with OTT will increase at a slower rate through the end of our forecast period in 2022. This year, OTT viewing will grow by 6.6% YoY to an average of 77 minutes per day. In 2022, time spent with OTT will increase by another 5.6% YoY. OTT will continue to account for more than half of total time spent with digital video this year and into the next.”

As for specific streaming services, adult users spent an average of sixty-two minutes per day on Netflix, fifty-three minutes on Hulu, forty-three minutes on YouTube, twenty-nine minutes on Disney+ and twenty-three minutes on Amazon Prime Video.

eMarketer also looked at the churn rates-the percentage of subscribers to quit in a given month. Netflix, for instance, had a churn rate of somewhere slightly above two percent nearly every month in 2020. In September that rate spiked to 4.4 percent, which may be attributable to the “Cancel Netflix” campaign in reaction to the controversial film Cuties. However, the churn rate dropped back down to 2.5 percent the following month.

And the survey noted that in 2020, the number of scripted series produced in the U.S. dropped for the first time in more than a decade. The number of such shows, 493, was still higher than ever since 2011, with the exception of 2018 (495), and 2019 (532.) This was attributed to the pandemic-related shutdown in production.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.

Image: Reuters