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New study shows cord-cutting in the US will continue to increase

A new report from eMarketer suggests that the trend of cord-cutting in the US will continue to increase at a rapid pace going forward. The report states that the number of households that cut the cord increased 19.2% this year.

By the end of 2019, the number of pay TV households in the US will decrease by 4% to 86.5 million and by 2021, the number of households with a traditional pay TV subscription will drop below 80 million.

Disney vs Netflix stock
Image by mohamed Hassan from Pixabay

The report also estimates that by 2023, the number of pay TV subscribers will fall to 72.7 million from 100.5 million in 2014. The number of households without a pay TV package will stand at 56.1 million.

This trend is said to be caused by traditional TV providers themselves as they focus more on improving profit margins by offering fewer promotions. The companies seem to be willing to lose customers rather than keep them on through unprofitable deals, says the report.

Also see: Netflix Q2 2019 Earnings Report

The competition is intensifying in the streaming space which has major players like Netflix (NYSE: NFLX) and Amazon (NYSE: AMZN) along with companies like Walt Disney (NYSE: DIS) and Apple (NYSE: AAPL) who are set to enter the field.

Netflix had 151.56 million paid subscribers at the end of its second quarter of 2019 compared to 124.35 million a year ago. The company’s total streaming revenue increased 26% to $4.8 billion. During its second quarter, Amazon’s subscription services, which includes Prime Video, saw a growth of 37%.

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