Cable TV ‘cord-cutters’ became the majority in 2022

The steady decline of cable and broadcast television, and the rise of streaming services, reached a sort of inflection point over the past year. 

Last summer, for the first time, streaming services like Netflix and Amazon Prime claimed the largest share of the television viewing audience, surpassing both cable and broadcast TV. Streaming captured 34.8 percent of July viewers, according to Nielsen data, compared to 34.4 percent for cable and 21.6 percent for broadcast. 

And then, sometime in the second half of 2022, cord-cutters became the majority. The share of cable and satellite television subscribers dipped to 48 percent, according to a report from Samba TV, a television technology company.  

The nation’s largest pay television providers lost 5.9 million customers in 2022, the largest drop on record, according to Leichtman Research Group. Pay TV subscribers have dwindled from 95.5 million to 70.2 million in a decade.  

“We’ve absolutely reached the tipping point,” said Dallas Lawrence, senior vice president of Samba TV. “Streaming is TV today, period. It is now the primary way that the majority of Americans consume television content.” 

Two broad forces drove the rise of streaming over the past decade.  

One was faster internet download speeds, which enabled Netflix and its peers to deliver high-quality streaming to subscribers without the image freezing up and the accursed swirling circle appearing on the screen. 

The other was mass dissatisfaction with the nation’s cable providers. 

“I don’t think anybody would say they loved dealing with their cable companies because, in most markets, they were a monopoly,” Lawrence said.  

Streaming arrived at a moment when many Americans felt their monthly cable bills were spiraling out of control. 

“You had all these add-on fees: that $60 bill all of a sudden wasn’t $60,” said James Willcox, consumer electronics reporter at Consumer Reports. “I think the way the cable companies treated their customers made a lot of people really look forward to leaving their cable company.” 

They called it cord cutting, or cord burning, in the case of the most aggrieved customers. But the term isn’t really apt. Many cable customers dropped cable while retaining internet and telephone service from the same company. 

Oddly enough, even cable companies are no longer pushing cable television with much gusto. 

“The providers themselves are less interested in the industry than they were five, 10, 20 years ago,” said Bruce Leichtman of Leichtman Research.   

The typical cable company also offers broadband, and profit margins are higher in that business than on cable television. 

“Cable companies are not cable companies anymore,” Leichtman said. “They are broadband companies. That is their focus.” 

A customer can see the shift in emphasis simply by visiting the website for Xfinity or Verizon: “You can hardly see how to get cable service,” Leichtman said. 

Who, then, still watches cable? 

Just over a third of American viewers, according to Nielsen. Throw in satellite and other broadcast customers, and traditional television reaches a little over half of the nation.  

“There are things about cable TV that people still find valuable,” said Jana Arbanas, U.S. Telecom, Media and Entertainment sector leader for Deloitte. “Two of those rise to the top: local news and sports.” 

Increasingly, though, news and sports are migrating to streaming platforms, reaching viewers on virtual television packages such as YouTube TV and Hulu + Live TV. Apple has pledged $2.5 billion to stream every Major League Soccer contest for a decade on its Apple TV platform. 

Even with the rise of virtual options, traditional cable and satellite television retain their appeal for some, especially older viewers.  

“Older people are still trained, have a different way of consuming content than younger people do,” Leichtman said.  

By contrast, roughly one-third of viewers who don’t have cable television have never had it and probably never will. That group is dominated by younger Americans.  

Broadcast television may be hanging on, but streaming services have transformed the way Americans watch television. 

The typical viewer of 2023 subscribes to two streaming services, said Lawrence of Samba TV. One is often Netflix, which commanded 7.3 percent of the overall television viewing audience in March, according to Nielsen. The other might be Hulu (3.3 percent of viewership), Prime (2.9  percent), Disney (1.8 percent) or HBO Max (1.2 percent). 

 On top of those long-term subscriptions, viewers tend to cycle through 30-day subscriptions to a third or fourth provider.  

“This is the epitome of consumer choice,” Lawrence said. “Consumers are now actively signing up subscriptions with the intent of canceling after 30 days because they’re doing it to watch one show.”  

Hordes of viewers subscribed to HBO Max long enough to watch House of the Dragon or The White Lotus, two of the hottest series of 2022. Viewers flocked to Paramount Plus to catch Tulsa King and 1923. Many bailed after the binge. 

Adding and dropping streaming services, a routine variously termed cycling or churning, “is really changing the landscape of TV,” Lawrence said. “Nobody has a stagnant audience anymore.” 

Research by Deloitte found that 44 percent of streaming customers churned on a streaming service in the last six months.  

“Millennials churn at a rate of 62 percent,” Arbanas said. “They are absolutely seeking the exact content that they want, but they are not willing to carry more streaming subscriptions than they have in the past.” 

All of that competition, and all of those choices, is great for anyone who remembers the soul-crushing exercise of late-night channel-surfing on cable. But today’s streaming landscape has grown as crowded as yesterday’s cable lineup, with hundreds of services vying for viewership: more than 300 in all, according to Arbanas. 

“The good thing is that consumers have more options than they ever had,” said Willcox of Consumer Reports. “The bad thing is that consumers have more options than they ever had.” 

The streaming revolution has “added a lot of complexity and offloaded a lot of responsibility onto the consumer,” he said. 

The trouble begins with finding the streaming service that carries the film or program the viewer wants to watch. Sites such as JustWatch and ReelGood allow viewers to search for streaming options, but they aren’t perfect.  

Once you’ve found and watched an episode or two of your new show on an unfamiliar streaming platform, you face a real risk of never seeing it again. Your television is probably not keeping track. 

And then there are the ads. Increasingly, streaming customers are turning to cheaper, ad-supported versions of Netflix and Hulu, and to free-TV providers such as Pluto and Crackle. 

Subscription-based services have a big incentive to draw viewers into ad-based streaming, which delivers revenues from two sources.  

But the services have not worked out the kinks in the ads, a deficiency familiar to anyone who has watched the same ad four, five or 10 times over the course of an ad-supported film.  

By the fifth viewing of the same ad, “the consumer actually forms a negative view of the product,” Lawrence said.  

For viewers who eschew ads, prices are rising. Netflix now costs as much as $19.99 a month. And streaming services charge top dollar for their “cable-replacement” plans, which stream live television. 

“You’re probably paying $65 or $70 a month just for those, and then you’re paying $15 or $20 for Netflix,” Willcox said. “If you’re subscribing to five streaming services on top of that replacement-TV service, you may be paying more than you were with cable.”