Netflix (NFLX) has been giving traditional cable companies nightmares for quite some time now. Several major companies in the entertainment industry are teaming up with suitable partners to compete with Netflix and other streaming services such as Amazon (AMZN) Prime Video.
The latest data released by research firm eMarketer reveals that cord-cutting is expected to grow by double-digits in 2018, surpassing earlier estimates. Over-the-top (OTT) viewership is also projected to rise higher than the previous expectations for this year.
The number of cord-cutters is expected to increase by 32.8% to 33 million in 2018. This will exceed the earlier projections of a growth rate of 22% or 27.1 million viewers for 2018 by 6 million viewers. The estimate for 2017 was 22 million while the actual number came in at 24.9 million at the end of last year.
Streaming services like Netflix, YouTube, Amazon Prime, and Hulu are expected to see increases in viewership, with YouTube expected to hit 192 million US viewers and Netflix expected to reach 147.5 million viewers by the end of this year. Amazon Prime is expected to reach a viewership count of 88.7 million while Hulu is expected to hit 55 million viewers. Compared to this, the number of pay-TV viewers is expected to decline 3.8% in 2018, higher than last year’s decrease of 3.4%.
The increase in viewership for streaming services is said to be driven by original content and a preference for multiple services. These platforms are investing heavily in their content, and they are providing live TV packages over the internet at reasonable rates without any additional expenses on devices or installation.
Streaming services like Netflix provide more convenience to the customer and take up fewer costs compared to traditional pay-TV companies, and they also allow for binge-watching, a trend that is becoming increasingly popular with each passing day. Customers appear to have saved more from cord-cutting, and very few have regretted their decision thus far.
There are options for traditional cable companies to partner with streaming services to reduce their losses. However, since such collaborations have not seen much progress yet, it is unlikely that they could bring about any meaningful change in the current trend at present. Going forward, as these partnerships stabilize, they could help bring down these losses even though it might not be possible to stop them entirely.