No Cable For Christmas

Danielle Beurteaux

This holiday season, shoppers are buying drones, Star Wars-themed everything, hoverboards, and Legos. Also, video games, robots, and VR headsets.

What they’re not buying so much are television sets. Aside from set manufacturer Samsung, other major brands are having a hard time selling. Sharp sold its name for licensing and left the North American market earlier this year; Panasonic sold its factory in Mexico and is decreasing production. (This is a trend that began a few years ago.)

Another big change in the television-universe is the drop in cable subscribers. The population of so-called “cable cutters”—those who have decided not to pay for cable—is also on the rise, and quite dramatically. According to one industry researcher, almost a quarter of American households won’t have cable by 2020. Combined with those who have never subscribed to cable, the two groups will make up about 17 percent of American households by the end of next this year.

This isn’t isolated to the U.S. In the UK, a similar trend is happening. There are fewer homes with televisions (admittedly still a minority, however).

People are still watching television programs, just not on actual televisions. We might soon come to a point when using the phrase “television program” is nonsensical (and let’s hope someone comes up with a better term than the catch-all “content”).

This trend isn’t just about technology and shifts in habits, although these are both part of it. It’s also coming from viewers’ increasing desire for simplicity. Viewers complain of the difficulties of getting all the components to work together and the cost. According to one survey, streamers are happier than cable-viewers about their watching experience. Younger viewers aren’t getting cable at all—their habits are already set. They’ve grown up enjoying the  accessibility, convenience, and ease-of-use of streaming on their laptops, smartphones, and other devices.

Once we started streaming, it’s hard to go back to traditional television. It’s changing what we watch, how we watch it, and how programs are being made.

And where the eyeballs are, the ad dollars follow. Industry analysts predict that television advertising budgets will drop. The beneficiary will be digital—that money is likely to go to online, streaming video, and social media.

The FCC might also bring about some disruption. There’s a renewed push for regulations that will change consumers’ relationship to cable companies. Rented cable boxes bring in $19.8 billion of revenue each year for cable companies, according a recent report. The FCC is considering new rules that would break cable-buyers dependency on those boxes for their television choices, potentially opening the market to a device- and producer-agnostic environment.

Another industry that’s evolving with the digital age is advertising. Read Why Most Ads Won’t Work In The Future.

 


Danielle Beurteaux

About Danielle Beurteaux

Danielle Beurteaux is a New York–based writer who covers business, technology, and philanthropy. Her work has appeared in The New York Times and on Popular Mechanics, CNN, and Institutional Investor's Alpha, among other outlets.

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