Cord-cutting is on the rise and hurting the cable industry

Cable companies have seen a new trend over the past few years that is hurting their business called cord-cutting.

Customers of cable companies like DirecTV, Spectrum and Dish have terminated their subscription from non-traditional television providers. These customers have given up traditional cable and satellite for online services such as Netflix, Hulu and Amazon Prime.

A survey conducted by LendEDU in December 2017 showed that 56 percent of Americans who had cable at the time were considering leaving their television providers for online services.

The main reason customers are deciding to leave traditional television behind is the price. In a March 2018 survey conducted by TiVo, 86 percent of the 3,330 peopled surveyed answered that they left their old television provider because monthly payments were too expensive.

Vincent Oedekoven is a student at Laramie County Community College who recently decided to cut the cord for the same reason.

“We really just wanted to pay less a month for stuff we really didn’t need,” Oedekoven said. “We can get all our TV shows on other services we pay for like Netflix and Hulu.”

The numbers show that both cable and satellite companies are seeing a decrease in customers.

In a March 2018 survey done by Leichtman Research Group, it was discovered that DirecTV and Dish TV both lost more than 1.5 million customers in 2017 alone, and it’s not just the satellite companies that are seeing these kind of losses. Specturm and Comcast, both cable providers, have seen their subscriber numbers decrease by nearly 400,000 customers in the same time period.

The biggest benefit of cord-cutting is the amount of money the customer saves. The average cost of a television package currently is over $100 a month, whereas a subscription for Netflix cost $11 and just $8 for a monthly Hulu subscription.

Customers also have the luxury of being able to find the television program they want to watch easier and consume it at any time.

“I save more money and I don’t waste as much time trying to find something that I want to watch,” Oedekoven said. “If there is something I want to watch I can go on and find it easier that way.”

Customers are leaving traditional television providers because they feel they can get everything they need from online services like Netflix and Hulu. A survey conducted by LendEDU in 2017 showed that 77 percent of cord-cutters use online streaming services to watch shows.

One of the biggest downfalls to online streaming services are a lack of live sporting events.

“Yeah we don’t get some of the games but we do get a majority of the big games that we want to watch through Hulu,” Oedekoven said. “There is a lot of games that we still miss though.”

For sports fans that are cutting the cord, there are alternative options out there to watch games. Sling TV and Youtube TV provide sports channels for a lower monthly cost. Youtube TV starts at $35 a month and Sling TV starts at $20 a month.

For the television companies, it’s not just American companies that are seeing a decrease. In a July 2016 survey conducted by the Better Business Bureau, households cutting the cord in Mexico have increased by 16 percent.

It’s not just Generation Z and Millennials that are switching over to streaming services either. According to a September 2017 survey done by the Video Advertising Bureau, these age groups do lead the U.S. in cord-cutting with 38 percent of the age group doing so, but baby boomers are not far behind. Baby boomers are up to 31 percent cutting-cords and 29 percent of Generation X population is following suit.

Traditional television companies still stand strong with seniors with only 3 percent surveyed cutting cords.

Spectrum and DirecTV did not respond to requests for an interview.

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