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With the rise of streaming services, is cable TV dying? How is the shift to streaming affecting consumers?
Cable TV subscriptions are declining rapidly as viewers shift to streaming, but streaming services’ inability to turn a profit is prolonging cable’s life. The transition from cable to streaming threatens the future of news coverage, particularly local news, as streaming services aren’t required to maintain news operations.
Keep reading as we examine experts’ views on this situation.
The Death of Cable
Is cable dying? For decades, cable and satellite TV services dominated American entertainment, reaching their peak around 2009 when they served nearly 90% of US households. But between 2014 and 2023, subscriptions dropped from 100 million households to 72 million—with the first quarter of 2024 marking the largest exodus since cord-cutting began. Industry analysts expect combined cable and digital live TV subscriptions to drop to 47.8 million households by 2027, while streaming service adoption has already reached 99% of US households.
Why Cable Is Disappearing
Consumer behavior has shifted dramatically away from traditional cable TV. Television viewership drops approximately 10% each quarter, and streaming services have captured much of this audience, with Netflix alone reaching over 67 million North American subscribers by 2019. Of individuals keeping cable, 82% also pay for at least one streaming service, indicating a shift away from traditional TV.
These changes have created a devastating financial cycle: As viewers leave cable, advertisers have substantially reduced their broadcast and cable budgets while increasing digital spending tenfold. This revenue loss forces cable providers to cut costs by reducing channel offerings, creating a downward spiral.
The Impact on the Industry
Cable’s decline has created a paradoxical situation for media companies: While cable TV fees remain their main profit source, the sector is rapidly losing value. Warner Bros. Discovery had to write down its cable channels’ value by more than $9 billion, and companies are slashing costs through widespread job cuts at cable brands. The industry is responding to this crisis in several ways:
- Content reduction. Major cable networks have largely abandoned original programming in favor of cheaper reruns and movies.
- Streaming adaptation. Networks are finding new ways to distribute content, either by producing shows exclusively for streaming platforms or making lucrative deals to stream their existing programs across multiple services.
- Industry consolidation. Traditional TV providers DirecTV and Dish announced plans to merge.
- Corporate restructuring. Comcast is considering separating its declining cable channels into a standalone company, creating a hub where other struggling cable networks could consolidate to reduce costs and increase bargaining power with TV providers.
| Why the Switch to Steaming? One example of the switch to streaming can be seen through Disney. In his memoir The Ride of a Lifetime, Bob Iger discusses the creation of Disney+. By 2016, Disney’s three big acquisitions (Pixar, Marvel, and Lucasfilm) were well underway and all looked like home runs. But this still didn’t feel like enough. Even though Disney had grown considerably, the technology and media landscape had changed even further. The massive technology companies of the day—Google, Apple, Amazon, Facebook, Netflix—commanded the attention of billions of consumers. All these companies were also investing heavily in creating their own content. In this climate, Disney had two choices. First, it could simply continue business as usual—it could continue distributing films through movie theaters and shows through TV, and it could license its content to distributors like Netflix and Apple. However, Disney risked being made a commodity content producer, just one option among thousands. The tech behemoths would continue to gain power and consumer loyalty, and eventually Disney might have no choice but to be on these networks, meaning it’d lose all its negotiating leverage and lose its direct connection to consumers. The other option was for Disney to control its own distribution to consumers, with no middlemen. This would require developing their own technology platform and severing ties with distributors like Netflix. It would also mean disrupting their own existing businesses in the short-term and losing many millions in revenue. But if they did it right, Disney could control its long-term destiny. That’s why they created Disney+. |
The Impact on Consumers
The shift from cable to streaming tripled broadband-only households between 2014 and 2018. However streaming’s promised benefits are eroding as services struggle to reach profitability. Subscription fees are rising, high-speed internet and its costs are mandatory, and providers are adopting unpopular cable-like practices: reducing new programming, making advertisements unavoidable, and creating channel bundles that make it harder to cancel individual services. Sports fans face particular challenges, as they need multiple services to watch games.
These growing frustrations with streaming may explain why many viewers remain hesitant to abandon cable entirely: 70% of current cable subscribers have maintained their service for more than five years.
Why Streaming Hasn’t Completly Taken Over: Sports and News
One major obstacle stands between cable TV and obsolescence: streaming services haven’t identified a profitable business model, with even major players like Disney+ losing billions of dollars since launch. While this financial uncertainty has helped preserve cable TV, streaming services are making aggressive moves to overcome it. Their primary target is cable’s strongest asset—sports programming. The acquisition of valuable sports broadcasting rights could deliver the final blow to cable TV. It won’t be easy, though. The price of sports rights has skyrocketed and the technical challenges of live sports broadcasting make this content particularly difficult to deliver reliably to streaming audiences.
This shift to streaming raises another concern: As broadcast networks consider becoming streaming-only platforms, both national and local news coverage face threats. Networks might eliminate their news divisions since streaming services aren’t legally required to keep news operations, while local TV stations, which primarily produce news, may struggle to survive. While national news coverage might shift to streaming and social media platforms, losing local news stations could create dangerous gaps in community information and civic awareness, threatening an essential pillar of democratic discourse.
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