The cable television industry has a new problem. Even though over 96% of homes in the United States have a television, an increasing number of people would be comfortable giving theirs up.
It’s not that Americans have decided they don’t want television-style programming. It’s just that they are increasingly willing to consume their entertainment on smartphones, tablets, and laptops.
Only 31% of Americans said it would be very hard to give up their TV, down from 44% in 2006, according to a study by the Pew Research Center. Over half of all U.S. adults (55%) said it would be a least somewhat hard to give up their television with only 16% of those ages 18-29 feeling that giving up TV would be very hard.
Younger Americans are increasingly willing to go without a television. Image source: Getty Images.
How big is cord-cutting?
This news comes at a time when cord-cutting has proven to be a growing trend. Cable (a category that includes cable, satellite, and cable-like digital subscriptions) has been losing subscribers since 2013 and the pace of those losses has begun to grow. After roughly tripling in 2015, numbers doubled each of the past two years.
Data source: Leichtman Research Group.
This shift is being driven by younger consumers being more likely to get their entertainment from digital streaming services. In fact, 61% of the 18-29-year-old age group said that streaming is the principle way they watch television, according to an earlier Pew report.
It’s a shifting climate where big screens have given way to smaller ones for younger Americans. This has really become a question of changing delivery systems and consumption habits. Young adults grew up watching video on their phones. As screens have improved, that experience has become more rewarding, making a traditional television less necessary.
What does this mean for business?
This trend could impact a number of businesses. It could mark the end of the days when consumers sought bigger, better, and more expensive televisions often for multiple rooms in the house. That’s bad for electronics makers and it’s probably something Best Buy and other electronics retailers should be concerned about.
Large televisions are not only a draw for those chains as many people like to see a TV’s look and picture before buying it, they also create other sales. Best Buy, for example, might sell all the accompanying cables, and even Geek Squad mounting services.
An increasing willingness to not have a television will also impact the traditional cable companies. Those brands, however, have already been adjusting and the ones that also sell broadband internet have generally added to their overall subscriber base.
For cable companies to survive as a pipeline for programming, they re going to have to continue to adapt. That means offering more flexible products priced aggressively. Young people aren’t giving up TV, they’re giving up — or are at least willing to give up — televisions. They still need sources of content and big cable may still have a place in that business.