via The Motley Fool
by Adam Levy
July 8, 2017
One research group estimates the trend will accelerate over the next five years.
Cord cutting started picking up steam in 2016 when 1.9 million pay-TV customers abandoned the service, according to an estimate from SNL Kagan. But that’s just the tip of the iceberg. The research group expects 10.8 million more customers to cut the cord over the next five years, with total subscribers falling to 82.3 million.
That’s bad news for pay-TV giants like Comcast (NASDAQ:CMCSA) and AT&T (NYSE:T). But it could be a major opportunity for virtual providers like DISH Network’s (NASDAQ:DISH) Sling TV to take share of the pay-TV market. Kagan estimates virtual service subscribers will climb to 11 million by 2021.
Cord cutters can’t live without TV
Even though some consumers ditch their traditional pay-TV plans, they still have a habit of sitting in front of the television. That leads them to spend more time watching over-the-top video services compared to cord-never households, according to data from Comscore.
Virtual pay-TV providers often offer cord cutters a lower-priced option compared to traditional cable, which may attract some to simply switch service providers. Considering the switching costs for virtual providers is extremely low for customers (and often includes free trials), many cord-cutters may opt to sample various services to see if any fit their lifestyle at a price they can accept.
There are currently just over 3 million virtual pay-TV subscribers in the U.S. Sling TV is the market leader with over 2 million subscribers.