The pay-TV exodus is ramping up as Netflix and other streaming services pump out high-quality original shows

NetflixNetflix’s ‘Arrested Development.’
  • TV cord-cutting will outpace projections and increase an estimated 32.8% in 2018, according to new analysis from Emarketer.
  • The firm projects that the total number of cord-cutters will jump from 24.9 million users in 2017 up to 33 million by the end of this year.
  • This hike in cord-cutting comes despite an increasing number of pay-TV providers forming partnerships with over-the-top (OTT) services like Netflix in an attempt to retain customers.

The percentage of people ditching their traditional pay-TV packages is expected to skyrocket this year, according to a new study from Emarketer.

The firm is projecting a 32.8% increase in 2018 for the overall number of cord-cutters: those who cancel their paid TV subscription with a cable, satellite, or telecommunications company.

This increase – far outpacing the firm’s previous projection (from July 2017) of a 22% increase for this year – would bring the total estimated cord-cutters from 24.9 million users in 2017 up to 33 million by the end of 2018.

Cord-cutting emarketerEMarketer

The significant hike in cord-cutting comes despite a swath of pay-TV providers forming partnerships with over-the-top (OTT) services like Netflix in an attempt to retain customers.

“Most of the major traditional TV providers [Charter, Comcast, Dish, etc.] now have some way to integrate with Netflix,” Emarketer senior forecasting analyst Christopher Bendtsen said. “These partnerships are still in the early stages, so we don’t foresee them having a significant impact reducing churn this year. With more pay TV and OTT partnerships expected in the future, combined with other strategies, providers could eventually slow – but not stop – the losses.”

It’s important to note that EMarketer’s figure for cord-cutters does not include those customers who cancel a traditional pay-TV subscription only to subscribe to a newer subscription-based digital service with a cable or satellite company, such as DirecTV NOW or Comcast’s Xfinity.

Still, overall, Emarketer estimates that 186.7 million adults in the US will watch traditional pay TV (cable, satellite, or telco) in 2018, which is down 3.8% over last year – and slightly higher than the 3.4% drop in 2017.

The firm also notes that streaming platforms like Netflix and YouTube are meanwhile experiencing rapid growth fuelled largely by demand for their original programming.

“The main factor fuelling growth of on-demand streaming platforms is their original content,” Emarketer principal analyst Paul Verna said. “Consumers increasingly choose services on the strength of the programming they offer, and the platforms are stepping up with billions in spending on premium shows.”

Netflix, which is increasingly dominating the field of original programming in the eyes of consumers, will have spent around $US8 billion on content in an effort to have over 1,000 original shows and movies on its service by the end of the year.

The streaming service’s spending is also paying increasing dividends in the realm of accolades, as Netflix broke a 17-year streak from HBO this year to earn the most Emmy nominations of any network – just five years after the company notched its first nominations in 2013.

5b47b07b69e6c931008b48be 960 720Jenny Chang/Business Insider

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