High Cost of Cable Weakens Value of Cable Advertising

From its launch in the 1960’s through the start of the new millennium, cable has been a major player in the advertising world; however, that trend is changing as users leave the service.

The strengths of cable have always been its combination of great reach and targeting options through a menu of shows.  But the mix of rising subscription costs, on average climbing by over 70% since 2000, and the growth of competitive video options (Netflix, Roku, Amazon Prime Video), has caused a decline in cable subscribers.

Rising number of homes without cable subscriptionIn the first quarter of 2018, the cable industry saw a decline of over a ½ million subscribers.  While not a new trend, it is increasing year-over-year.  In the first quarter of 2017, the cable industry saw a drop in the subscriber base of 412,000.  Comparing 2017 and 2018, the loss increased by almost 20%. 

By the end of 2018, the number of homes without a paid cable subscription will exceed 25% (Statista).

What is driving cable’s continued loss in paid subscribers?

  1. While cable costs have increased, median wages have remained the same or dropped, forcing consumers to find alternative entertainment options.
  2. Streaming services continue to attract new viewers.

While cable was losing subscribers in Q1 2018, services like Netflix and Roku were growing.  During the same time, Netflix added over 7 million subscribers to its streaming service.  In addition, Roku reached a new record, streaming over 5.1 billion hours of content, up 50% year-over-year.

Are you looking for an alternative to cable advertising?  MANSI Media can help by providing access to the top hyper-local properties, in print or digital, throughout the country.  Let us help you simplify your advertising process with a single phone call (717-703-3030) or email (sales@MANSIMedia.com).

Interested in reading more about the cable industry?  Check out the links below.

Roku CFO: Our Earnings Beat Reflects the Powerful TV Cord-Cutting Trend

https://www.thestreet.com/investing/earnings/here-are-four-big-numbers-from-roku-s-earnings-release-14585074

Netflix hits 125 million subscribers

http://money.cnn.com/2018/04/16/technology/netflix-earnings/index.html

Pay TV bills up 74% since 2000, are a leading cause of cord cutting, Kagan says

https://www.fiercecable.com/cable/pay-tv-bills-up-74-since-2000-leading-cause-cord-cutting-kagan-says

 

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