The Rise of Streaming and Fall of Cable TV

With cable subscriptions in decline, I wanted to revisit the Nielsen data on the number of people using cable TV, streaming, and over-the-air antennae. I wanted to see how fast streaming is growing compared to the decline of Cable and Satellite TV. As you will see, the picture isn’t pretty for cable TV.

Cable TV and Streaming Numbers

I took a look at the five years of Nielsen Total Audience Reports. The reports show the viewing habits of U.S. TV-watching households. They give a mutually exclusive breakdown of households that watch TV only using an antenna. Those with Cable, Satellite, or Telco supplied pay-TV and households that use broadband to stream TV. The table below details the following information over the past five years.

Table Definitions

vMVPD – vMVPD stands for “Virtual Multichannel Video Programming Distributor.” These are live streaming services like Hulu + Live TV, Philo, FuboTV, Sling TV, etc. that offer a channel lineup over the internet and typically watched on a streaming device like a Roku or Amazon Fire TV. This number is the percentage of households that use a vMVPD. 

OTA – The percentage of households that use an over the air antenna and don’t have a broadband internet connection

Only Internet – Percentage of households with at least one TV/monitor that receives video exclusively through a broadband internet connection instead of an OTA antenna or traditional cable or satellite.

Cable + Sat – These are traditional cable and satellite subscribers.

Streaming vs. Cable Data Table

The data in the table below are mutually exclusive. Nielsen does this by determining if a household with a working TV uses Traditional Cable or Satellite. If not, then they see if they are using a vMVPD. If they don’t, then they determine if they use an Antenna. If the answer is no, they ask if the household watches video over broadband. This captures the primary way a household watches TV. Below is what this data looked like over the past five years.

Live TV Streaming is on the Rise

Live TV Streaming Services (vMVPD) are exploding in growth. These are services like Philo, Sling TV, Hulu Live TV, and YouTube TV. These first of these services launched in 2015, and they already have 7.7% of the TV viewing market. That’s a total of 9.3 million households. Furthermore, look at the growth rate over the last three years:

vMVPD Households per Year

• 2017 – 1,674,400
• 2018 – 4,076,600 (Up 143% from 2017)
• 2019 – 6,512,400 (Up 60% from 2018)
• 2020 – 9,317,000 (Up 43% from 2019)

These households don’t solely use live TV streaming services. For example, in 2020 data, 10% of vMVPD homes also subscribe to traditional cable or satellite services, while 26% also used an over-the-air antenna. 

The Declining Cable TV Subscribers

According to Nielsen’s Cross-Platform report from 2011, by the end of 2010, 105 million U.S. households watched television through a telecom (like Verizon Fios), satellite, or cable TV subscription. In 2020 83,817,000 households still use traditional cable or satellite TV. (That number factors in the 10% of vMVPD households also subscribe to cable or satellite.) That’s a loss of over 21 million cable and satellite subscribers this decade. 

That trend has seen a drastic acceleration over the past four years. In 2016 just over 100 million households still used cable or satellite TV. Therefore 75% of cable TV subscriber losses came between 2017 and 2020. 

What Does The Future Hold

While we aren’t in the prediction business, it’s plain to see the old ways of watching TV are in rapid decline. However, that doesn’t mean the end of the TV business for giant companies like Comcast, Verizon, and AT&T. We still need internet access to stream content, and these are the companies that hold those keys. More than likely, these companies will try to transition their platforms to be delivered over the internet. Comcast has already dipped their toe in these waters with Xfinity Flex. 

Unfortunately, the price of TV is beyond the control of cable companies and vMVPDs. These prices are primarily due to network owners demanding higher costs every year for the same content. We’ve already witnessed the rapid price increase in services like YouTube TV and FuboTV. I predict that as long as people want to bundle these channels, the prices will continue to increase. However, it’s not all bad news. Live TV streaming services offer competition to the once-dominant cable TV providers, limiting the rate at which prices increase. Also, there are innovative services like Philo that have bundled channels together to keep their plans affordable. If Philo continues its success, we are likely to see other services adopting this model. 

In the end, it’s up to the consumer. If we are willing to pay the price, then that’s what the price will be.

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