Millennial Cord Cutting A Scary Reality for Cable MVPDs
A grim reality has set in for MVPDs (multichannel video programming distributors) a.k.a. the Cable Companies, with the release of new numbers from Wall Street data firm, Pacific Crest. The data is staggering, with some reporters referring to a “cord-cutting apocalypse”. The new numbers show a reduction in cable subscriptions that over tripled from Q2 of last year. Subscriptions fell 141,000 in Q2 of 2014 and then took a nose dive in Q2 of this year with a loss of 463,000 subscriptions. This is no fluke, either.
Clearly the trend, especially among millennials, has been to forgo an expensive cable subscription for application subscriptions like Netflix, Hulu and Amazon Prime. In addition, TV shows being produced and released by companies like Netflix are seeing large success and drawing big name actors.
In 2009 the number of U.S. households with cable subscriptions peaked with almost 90% of households having a subscription with a Top 8 Cable provider. As of Q2 of 2015 that number has dropped to around 76%. In response to the dropping numbers, Cable companies scrambled to offer “skinny bundles” that allowed a bit more control over the channels being purchased and a reduction in bundle prices. These offerings (i.e. Sling TV) have seen little little interest, which companies like Netflix, Hulu and Amazon Prime are seeing subscription growth between 20 – 45%.
Millennials believe in having control over content that they specify and having access to it all of the time and while they are willing to spend and spend big on technology, they are frugal and savvy when it comes to contracts and having to pay for what they don’t use. The trend towards cord-cutting is very black and white and building owners are becoming aware of resident preference for property-wide wireless access to support cord-cutting service, voice calling and of course, provide internet access.