Cord cutting is still increasing among U.S. households as prices and inflation continue to cause many to reconsider their entertainment options. This trend is expected to continue with reports predicting over the next five years the global streaming market will increase to roughly $175 billion and the overall global entertainment and media industry will close in on $3 trillion in revenue by 2026.
PWC’s Entertainment and Media Outlook estimates only 38 percent of U.S. households will continue using pay TV as 49.9 million homes drop cable by 2027. The report takes into consideration the “cooling” effect streaming is currently experiencing.
“The subscription video-on-demand (SVOD) boom triggered by Netflix, which sparked streaming wars on a global and national scale, has dominated the OTT market over the past decade but stuttered in 2022.”
During the pandemic, streaming saw a considerable uptick in subscriber numbers as cable declined, but now that’s starting to stagnate as normalcy resumes. Even so, cable is looking at some serious competition in the global entertainment industry.
“Traditional TV, beset by competition from OTT streaming services, will see global revenue shrink at a -0.8 percent CAGR, from U.S. $231 billion in 2021 to U.S. $2222.1 billion in 2026,” says the PWC report.
Gaming, streaming, cinema, and a number of alternatives to cable are setting a foundation to reduce cable’s grip on U.S. households.
Live sports events are a huge contributing factor keeping people tied to cable providers, though this may not be the case much longer. Several sports leagues are renegotiating contracts and in the midst of it are considering cutting ties to cable as well.
Streaming platforms can offer leagues a larger audience, however traditional television is practically a staple with sports fans – and we all know how sports fans love tradition. Many wouldn’t consider jumping to a streaming service simply because it offers all their favorite teams.
Whether cable can keep up with streaming platforms with or without sports is up for debate. For now, streaming and cable continue to compete for audiences. Advertising-based Video on Demand (AVOD) is another factor the PWC report predicts will heavily factor into future analysis. AVOD offers a cheaper way to stream, and a growing number are completely free to use.