Even though consumers were thought to have increased their use of pay-TV during the pandemic, it turns out this hasn’t stopped a historic number of subscribers from cutting the cord. New data from eMarketer estimates that, by the time 2020 comes to a close, 6.6 million households will have canceled their pay-TV subscriptions this year, bringing the total number of cord-cutter households in the US to 31.2 million.
This means that by the end of the year almost one-quarter (24.1%) of US households will be cord-cutters. This share is only expected to rise in the next few years, with eMarketer forecasting that by 2024 cord-cutters will account for more than one-third (35.4%) of all US households – a total of 46.6 million households.
It’s no wonder more Americans continue to cut the cord. More people are being drawn to subscription-on-demand (SVOD) services than ever before. And, while they are finding value in these types of services, they are less inclined to see pay-TV as being a good value.
The drop in traditional TV viewers is also reflected fewer ad dollars being invested in the channel. The pandemic, of course, has not helped. eMarketer data from June shows that this year US TV advertising spending will fall 15% year-over-year to $60 billion. Even with a predicted recovery, by 2024, spending is estimated to be $67.5 billion – which is lower than the $70.6 billion spent in 2019.
For its part, PwC has slightly more rosy estimates. Although PwC predicts that the US TV advertising market will fall to $62.3 billion this year, from 2019’s $70.4 billion, it also forecasts a recovery by 2024 ($71.6 billion).
Amid this stagnancy in ad spending on traditional TV, there’s an argument to be made that advertisers should further explore ad-supported SVOD services. Previous research has found that not only are consumers showing an increased interest in such services, but also that these services positively impact their purchase decisions.