There were significant financial losses to the cable industry in recent years. This might lead you to the conclusion that people are saving money on television watching but that is actually not the case. In a study conducted by Leichtman Research, it was discovered that television subscription prices continue to rise over time. Consumers are paying 40% more money for their television watching privileges than they were 5 years ago, says the study. Back in 2011, customers would pay $73 for a satellite subscription. Today, that amount has increased to more than $100.
Leichtman’s study also says that overall about 3% of TV households last made a subscription to a tv service in the last 3 years, 6% did so 6 yeas ago, and 6% have never bothered to get a paid tv subscription. 25% of people who moved in the last 12 months did not bother getting a paid television service which is way down from in the past when more than 50% would subscribe. 12% of paid traditional television subscribers change companies or get rid of their subscription altogether. 6% of traditional television subscribers will disconnect and never resubscribe gain within the next 6 months and this trend has been continuing for years. You can read more data from Leichtman’s report here
This trend has been destructive for the growth of subscribers because 82% of househoulds that have televisions also have a pay for tv service in their home. This is at the level the industry was at 11 years ago which represents a serious regression. The pay tv industry has suffered losses of 800,000 customers since last quarter alone according to the research group SNL Kagan. What this means is that people have stopped paying for traditional television service. Millenials in particular, are eschewing pay for television. The CEO of NBCUniversal Steve Burke commented that none of his five children aged 19 to 28 have a satellite or cable subscription at home. The industry knows that it is in decline.
Companies like Sling are trying to step into the gap between flexible tv streaming services that are geared towards younger people. Companies such as Hulu and Amazon are also creating customized televisions of their own that will be integrated with their subscription service.