What's Going to Replace Cable TV?

When you get your cable and internet bill every month, if you’re like me (and most people), you’re probably wondering why it keeps increasing when your plan has been staying the same. It seems like your bill just keeps getting higher and higher every year and nothing really is changing about your service. This leaves you wondering what are you really paying for if it’s not better service or any new offerings.

On top of all that, you might not even have any choices when it comes to selecting a provider for cable and internet. And when I know I only have a few choices or no choice at all, that really aggravates me. I start to feel like I’m being forced into choosing the only option that’s available to me.

Doxo’s U.S. Cable & Internet Market Size and Household Spending Report for 2021 shows that Americans spend $147 billion annually on cable and internet bills. In that same report, Doxo found that 82% of U.S households with a cable and internet bill spend $116 per month, or $1,392 per year. While that may not seem like a lot to some, it definitely begins to add up, especially if your provider is making increases to your bill yearly.

I know I’m not alone in my frustrations about the limited options when it comes to cable and cable providers. Those frustrations have been observed and heard, especially from a lot of cable networks and other tech companies, which has led the networks and companies to take the initiative to create apps and platforms to give consumers more options.

The streaming services options seem to be endless. There’s Netflix, Hulu, Amazon Prime Video, Disney Plus, HBO Max, Paramount Plus, Peacock, and Roku … just to name a few. There are so many options nowadays when it comes to streaming that it’s sometimes difficult keeping your subscriptions to a minimum. It just seems like a no-brainer — these streaming services can be relatively cheap — unless you have a lot of subscriptions. Then how much you’re spending a month on streaming can start to add up. 

I’m signed up for about five different subscriptions with different streaming services. None of them are more than $10 every month besides my Netflix subscription, which is near $20 a month. Either way, it’s still cheaper than what I’ve paid when it comes to cable and internet, which was usually around $130-something every month. And now there are deal bundles where you can combine multiple subscriptions at a lower rate. 

Is Cable’s Demise Approaching?

The number of people who are cutting ties with cable companies continues to rise. They are tired of price increases with no explanation and prefer being able to choose what they want to be subscribed to instead of getting channels they never watch or having to add package options in order to get certain channels, which always results in a much higher monthly bill.

Consumers are choosing what they want to watch, and if they don’t watch it they can cancel the subscription. Even if you added five different subscription plans, it would still be less than $100 a month. For most people, this is the obvious choice.

According to a recent Pew Research Center survey of U.S. adults, “The share of Americans who say they watch television via cable or satellite has plunged from 76% in 2015 to 56% this year.” The survey also found that “some 71% of those who do not use cable or satellite services say it’s because they can access the content they want online, while 69% say the cost of cable and satellite services is too high and 45% say they do not often watch TV.”

This survey also pointed out that the younger generation has little to no need to choose a cable or satellite provider in order to get TV access. The survey suggests that “only about a third (34%) of Americans ages 18–29 now get TV through cable or satellite,” which is down 31% from 2015. And about 46% of those ages 30–49 get TV through cable or satellite, which was down 27% from the survey in 2015. 

It appears that these percentages of people relying on cable and satellite for TV access are likely to decrease as older generations get older and the younger generations begin to dominate the population.

Younger generations have grown up with streaming services rather than relying on cable or satellite to get TV access, so it makes sense that we have been starting to see TV networks and other tech companies emerge onto the streaming market and establish their own platforms for customers to subscribe to. 

These companies are etching out a spot for themselves in a massively growing market.

A report by Grand View Research indicated that the global video streaming market size was valued at $50.11 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 21% from 2021–2028. There is plenty of room in the next seven years for many of these companies to grow, innovate, and become market leaders.

Cable TV is on the verge of being a thing of the past, but that doesn’t mean well-known cable and satellite companies won’t be dabbling in streaming services — if they haven’t already. However, they will have to adjust their business model a bit since they won’t be able to take advantage of consumers. They will no longer be the only option for consumers and will have to compete with multiple streaming services that have much lower and affordable price points than what they are used to.

This entire market is just heating up and continues to put a lot of pressure on cable and satellite providers.

Until next time,

Monica Savaglia

Monica Savaglia is Wealth Daily’s IPO specialist. With passion and knowledge, she wants to open up the world of IPOs and their long-term potential to everyday investors. She does this through her newsletter IPO Authority, a one-stop resource for everything IPO. She also contributes regularly to the Wealth Daily e-letter. To learn more about Monica, click here.