The Mild Trickle Of Cord Cutting Continues, Streaming Gets A Little More Mainstream
1. The Mild Trickle Of Cord Cutting Continues
Leichtman Research released their 2023 cord cutting numbers and cord cutting is, as you might expect, still happening. Only at a mild trickle and not the “massive wave” you keep reading about.
In 2023, the major MVPDs lost 5.035 million subscribers, a net loss of 6.6 percent of their total subscriber base. (For those of you who like raw numbers, they’re down to 71.242 million subscribers.)
Which is not nothing.
Or even close to not nothing.
2023’s damage was slightly more than 2022’s when the industry lost 4.6 million subs. So let that sink in: 400,000 more people cut the cord in 2023 than in 2022. Out of somewhere slightly north of 100 million households.
So, one might ask, why does one constantly read about the “massive wave of cord cutting”? Why does the media hew to this clearly false narrative?
And I will tell you.
Many writers, even the ones who have bothered to do their research (see what I did there) don’t understand that switching to a vMVPD is not actually “cutting the cord.”
When you watch YouTube TV, you see the same broadcast and cable networks you see when you watch via Comcast or Charter. With all the same ads. It’s just a different delivery system.
And yet many of the headlines you see will focus on the 7 million subs the traditional MVPDs lost, not the 2 million the vMVPDs gained.
Why It Matters
To be clear, cord cutting is most definitely happening and it’s most definitely an issue, but it’s not happening at the pace much of the coverage would have you believe.
This matters a lot because we are going to be in this hybrid world where people watch both cable and streaming for quite some time and the industry needs to accept that.
The same way they need to accept that the vMVPD services serve as what we’ve been calling a “nicotine patch” for the industry: people want to cut the cord, they just aren’t ready to give up all their favorite cable networks. Which is why close to 2 million new subs signed up for vVMPDs last year. The fact that it’s cheaper and lets you use a single remote for all your TV needs does not hurt either.
The slow pace of cord cutting and people’s reluctance to give up a system that still has many flaws (two year contracts!) highlights something we’ve been calling out for a while, something most of you are likely all too well aware of: streaming is confusing AF. Or, if not necessarily confusing, way more of a hassle than it needs to be.
It’s hard to find pretty much everything.
The interfaces largely suck and seem designed more for advertisers than for viewers.
And tuning in requires you to navigate an entire gauntlet of screens till you get to the show or movie you were looking for. To the point where getting there can feel like you’ve just reached the next level on a video game.
At which point you’re sort of stuck—you can’t quickly flip to another show or another service just to check a score and then flip back again.
That’s also because most streaming interfaces are designed with casual viewers in mind, the sort of people who have a show or two that they are “watching” (e.g. binging) with an occasional sporting event thrown in.
Versus the larger, but less affluent and less educated cohort who finish up dinner and then turn on the TV to see what is on. Pay TV is designed for these viewers and there are still a whole lot of them.
Which is why they are unlikely to give up on it.
No matter how badly the tech press wants them to.
That doesn’t mean they don’t also have a Netflix subscription or a Paramount+ one, just that they are not planning to give up their pay TV subscription any time soon.
What You Need To Do About It
If you are a reporter and you are writing about the TV industry, remember that facts matter. No matter how many more clicks a sensational headline will get you.
If you are a streaming service, you need to think about your interface and how to make it easier for users. I would suggest considering something that can accommodate both on-demand and linear viewing and makes search and discovery easier. That’s something AI can help with big time. I’d also think about letting viewers select a default user, so that I don’t have to go through the extra step of logging on as me (and not one of my kids) each time.
If you are an advertiser, you need to prepare for many more years of a world where your customers are on both streaming and cable and figure out how to make that work for you.
2. Streaming Gets A Little More Mainstream
It’s always nice when the two Week In Review stories play off against each other. Even better when they involve not one TVREV Thought Leaders Circle member, but two.
As noted above, the Hybrid Era of TV is still going strong and advertisers are waking up to the fact that they need to reach both audiences with some sort of coherent plan.
Or, to be more exact, they’d woken up to that fact long ago. There just haven’t been a whole lot of easy ways to act on it.
Which is why we are now seeing announcements like the one from Magnite and Mediaocean this week around a plan to make buying streaming TV as part of an overall omnichannel plan a whole lot easier.
The mechanics involve buyers who use Mediaocean being able to plan, execute and reconcile ad campaigns on streaming directly from programmers who work with Magnite. That latter category includes A+E, AMC, DirecTV, Dish, Disney, Fox, LG Ad Solutions, VIZIO, and WBD, so a whole lot of inventory.
But the key takeaway is not so much about the particulars of the deal, but rather, the effect, which is to make doing an omnichannel buy that includes streaming much easier to execute.
Why It Matters
Brands need to reach consumers where they are. Not where they want them to be. And consumers, they are a fickle bunch.
So that someone who is a big football fan may watch a lot of pay TV in the fall and early winter when that is the primary way to watch college and pro football, only to switch to a mostly streaming diet come spring, so they can catch up on all the shows they missed.
Point being, brands and agencies need to have an easy way to spend their money across multiple platforms and, more importantly, a way to buy streaming inventory directly from the sellers.
Meaning that we will soon see a lot more programs that work to achieve this goal and much more pressure on programmers to work with ad tech firms to make this happen.
And vice versa.
What You Need To Do About It
If you’re an agency and you tell the world that you are “video agnostic” but in reality you maintain siloed TV and “programmatic” teams who barely talk to each other, time to wake up. You could probably get away with this up until now—your clients were not all that concerned about an integrated buy, or could deal with pretending that what you showed them was an “integrated” buy, but that’s not going to last much longer. So time to do some real integration—it’s not all that hard if you put your mind to it.
If you are Mediaocean and Magnite, take a bow—every step towards making buying streaming TV easier is a big one and it’s something the industry desperately needs. Well done.