Traditional cable television has been struggling to keep up with streaming services, more so now than ever before. Former Treasury Official and Morning Joe economic analyst Steve Rattner broke down some numbers concerning both studios and the talents who work for them.
Back in 2015, around 80% of U.S. households had either cable or direct-to-satellite broadcasting. Now in 2023, only 49% of households have a contract with a broadcasting cable provider as streaming snags more viewers. In the same timeframe, streaming subscribers jumped from 52% to 78%, essentially switching spots with cable as the dominant force in entertainment.
The percentage of time watching broadcasting and streaming services has already shaken up the entertainment world. Less than 3% of the total time watched was spent on a streaming platform. Now 37.7% of the total time watched is via streaming services while broadcast cable numbers are declining.
U.S. entertainment revenues across pay television, home videos, and movie theaters have all fallen substantially, whereas streaming revenues have gone up $27 billion from 2012 to 2022. In comparison, pay television revenues have decreased by around half – a loss of $67 billion.
This creates an issue for cable companies as they are losing revenue from both lost members as well as ads. Actors and writers are losing residuals from cable providers as more people switch to streaming only.
Broadcast television pays residuals for every program that airs. Residuals accrue each time a title airs, so fewer viewers mean fewer residual payments for talents.
Payments are determined by the number of people who tune in to watch, unlike streaming platforms that pay a lump sum based on the number of total subscribers.
Residuals are one of the main driving points for writers, actors, and studios as the strikes continue. Union members want 2% of streaming residuals, and studios are saying they can’t afford this.