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40 Percent of America Will Cut the Cord by 2030, New Report Predicts

A new market analysis predicts the slow death march of pay TV will continue.

Kaleigh Rogers

Kaleigh Rogers

Image: Alex Davidovic/Vimeo

As a haughty millennial, the fact that anybody still pays for traditional cable TV baffles me, but 85 percent of US households still do. That tide is slowly turning, however, and by 2030, as many as 40 percent of Americans will have cut the cord, according to predictions in a new report by market analyst TDG Research.

The writing has been on the wall for some time, TDG, a boutique consulting firm focused on the future of TV, wrote in the report. After the recession, many Americans were looking to cut unnecessary expenses, which kicked off a trend of cord cutting. Coupled with the rise of digital streaming services like Netflix and Hulu, these trends contributed to traditional pay TV’s decline, something TDG predicted back in 2010.

Those predictions proved true, with the percent of US households still shelling out for cable dropping every year since 2012. If the trend continues on the current path, TDG predicts the percent of US households subscribing to pay TV will drop to 60 percent in the next 13 years.

"TDG said early on that the future of TV was an app. Unfortunately, most incumbent multi-channel video providers weren't taking notes," Joel Espelien, TDG Senior Analyst, said in a press release. "The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system."

Back in the day, internet subscriptions were an upsell from cable or telephone providers. Now the opposite is true: internet is the must-have, while cable or home phone are often a luxury add-on for Americans. Last year, the number of broadband households surpassed the number of legacy pay-TV households, according to the report.

Cost is a major driver of this shift: the cost of bundling a few favorite streaming services together still pales in comparison to the average cable bill. TDG found that two thirds of cord cutters and “cord nevers” (people who have never paid for cable) said service expense was the key reason they do not use legacy pay TV services.

But there’s also a generational shift: 61 percent of adults aged 18-29 say online streaming services are the primary way they watch TV, according to a recent Pew Research Center poll. It was the only age group where cable doesn’t reign supreme, with cable’s significance increasing by age group:

Having grown up on the internet, it’s natural and easy for younger generations to consume media through various digital media rather than paying a single source for all entertainment. And the cost of paying for something you don’t even use (like channel bundles where you only want the one channel out of six) is an anathema for us, especially after coming of age in the midst of one of the worst economies in recent history. So it’s not surprising that this is where the trend is going, but it will be interesting to see how quickly we get there and how long it will take before legacy TV providers finally get the hint.

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