A new household formed used to reliably mean a new subscriber to cable or satellite TV. But no longer. The number of Americans who have cut their cable TV cords increased sharply this year, as did the number of households that have never had a cable TV subscription, despite a substantial increase in the number of new households formed, according to research published this week by The Convergence Consulting Group.
“Normally, you would have a bump up,” TCCG President Brahm Eiley said, “but you didn't.”
According to TCCG’s research, published as part of a report titled "The Battle for the American Couch Potato," more households were created in 2014 than in any of the previous five years. During those five years, dim economic prospects held household creation back, as more young people stayed at home with their parents or put off getting married.
But 2014 was one of the strongest years the American economy’s had since the recession, with new highs in the stock market and the best U.S. jobs numbers in 15 years. Warmed by all the good news, reluctance melted away: 1 million new households were created in 2014, compared with half a million households created the year before that.
But it didn’t keep Americans from cutting their cords. An estimated 265,000 Americans got rid of their cable TV subscriptions in 2014, according to TCCG’s research, and an estimated 329,000 will get rid of their subscriptions this year. That number is more than double the 155,000 Americans that abandoned their pay TV obligations in 2013, and it’s a number that TCCG expects will total 400,000 people in 2017.
“We're arguing that's going to sustain and even accelerate,” Eiley said.
The number of households that do not have television at all is growing too. TCCG predicts that by the end of 2015, 19.9 percent of American households will not have a pay TV subscription.
Through the first decade of the 21st century, U.S. cable TV providers acquired an average of 2 million new subscribers per year. That number slid dramatically at the start of the next decade, when the average number of subscriptions added fell to 190,000. The first real decline happened in 2013, and that decline has accelerated since.
“It's easy to get excited about this,” Eiley said, "but TV's still going to be the majority for the next 10, 20 years.”