Who needs cable or satellite TV? Cord cutting picks up speed
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In 2006, eMarketer, a business analysis firm, predicted the demise of the "good ol' reliable landline telephone." They were right. In 2018, the firm sees ever larger numbers dropping cable and satellite TV packages in favor of internet video services.
EMarketer isn't prophesying the end of of conventional television yet, but you can see it from here. The number of cord-cutters will climb 32.8 percent this year to 33 million. That's higher than July 2017's 22-percent rate (27.1 million).
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You can read the numbers for yourself. Akamai, the content delivery network (CDN), recently reported that the 2018 World Cup was the most-streamed sporting tournament ever: "France not only took home the trophy in Russia, they also won the most-streamed game record."
The highest traffic peak on the Akamai platform during a single game of the tournament was during the semi-final between France and Belgium, during which bandwidth reached 22.52Tbps. To put that in context, four years ago, the Brazil World Cup peak was 6.88Tbps.
All together, 2.7 times as much data was streamed from the Russia World Cup than was streamed in Brazil in 2014 and 2.3 times as much as for 2016 Rio's Olympics.
While the World Cup did well for Fox, which owned its broadcast rights, eMarketer noted that, while 186.7 million US adults will watch pay TV in 2018, that's still down 3.8 percent from last year.
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Live sports has often been hailed as the savior for live OTT TV. That's not true. ESPN's slogan is it's the "Worldwide Leader In Sports," but ESPN's been laying people off as its advertising revenue drops. Besides, with the rise of skinny TV cord-cutting services such as Sling TV, Sony PlayStation Vue, and YouTube TV, you no longer need cable or satellite to watch live sports.
As EMarketer points out, "the streaming platforms are growing at the expense of pay TV losses. In fact, eMarketer has increased its future viewership estimates for YouTube, Netflix, Amazon and Hulu." This growth is being fueled not just by skinny TV cost savings but by more original programming from services such as Netflix and Amazon Prime Video.
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The cable and satellite companies aren't blind. They know what's happening. "Most of the major traditional TV providers [Charter, Comcast, Dish, etc.] now have some way to integrate with Netflix," said eMarketer senior forecasting analyst Christopher Bendtse. But, we don't foresee them having a significant impact reducing churn this year. With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow -- but not stop - -the losses."
It's not just people replacing their pipeline to network and cable television. "The main factor fueling growth of on-demand streaming platforms is their original content," remarked eMarketer principal analyst Paul Verna. "Consumers increasingly choose services on the strength of the programming they offer, and the platforms are stepping up with billions in spending on premium shows."
Read also: How to stream the World Cup 2018 online
The nominations for the Emmy Awards underline this. For the first time, the champion of streaming, Netflix had the most Emmy nominations beating out long time champ HBO.
Old-school TV isn't done yet though. Technically, our internet isn't quite up to the challenge of delivering all the video goodies we want. For example, according to data from the streaming TV analysis company Conviva, during the World Cup, there were 75.8 million attempts to stream the games, but over 15 percent of these attempts failed.
Why? CDN provider Limelight Network's senior director Mike Milligan explained, "Delivering live streams for the World Cup is no small feat. The biggest challenge can come from relying on a public network for content throughput. Based on the time of day, location or other factors, these networks become overcrowded and unreliable -- creating outages or issues with latency and rebuffering. A limited number of global Points of Presence (or PoPs) -- data centers with high-performance servers that can deliver content -- can also impact the streaming experience."
It doesn't take much to disillusion fans who run into internet video problems. Milligan continued, "Consumers simply have no patience for streaming outages or rebuffering. In fact, our 2017 State of Online Video report found that if a video rebuffers twice, more than 61 percent of consumers will give up and stop watching the content altogether. It's critical to build a delivery infrastructure that ensures content is accessible to any fan. In a congested streaming market - it's clear that those who make the investments now will attract and retain audiences."
So, while the future of television will be online, we still need to deal with our inadequate internet before we can write off conventional TV carriers.