Batman is getting ready to help you cut the cord. Ironman is preparing to slash your cable bill. Both of these super heroes and their big media owners are betting new streaming services will continue the trend of consumers abandoning traditional TV.
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According to a new forecast by eMarketer, the number of American cord-cutters has jumped by 19.2 percent just this year. The good news for Batman – who will be featured in the upcoming WarnerMedia HBO Max service – and Ironman – a star of the soon-to-launch Disney Plus platform – is that eMarketer expects that number will rise to 25 percent by 2022.
The report also forecasts that the number of U.S. households with pay TV subscriptions will decline by 4.2 percent to 86.5 million this year. The continued rise in cord-cutters comes amid the growth of cheaper alternatives like Netflix, Hulu, CBS All Access and upcoming services like Disney Plus, HBO Max, NBCU and BBC and Discovery's nature-filled streaming service.
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Both Disney and HBO's streaming services are expected to hit consumer devices in 2020. BBC and Discovery's conjoined streaming service is reportedly expected by the end of 2019.
With consumers turning to such streaming services, eMarketer says that satellite, cable or telco providers will take some big hits.
By 2023, eMarketer anticipates the total number of pay-TV subscribers to decrease from 100.5 million in 2014 to 72.7 million. That means the number of households without a cable, satellite or telco pay subscription will rise to 56.1 million, up from 22 million in 2014.
Not only is TV viewership declining, so is the amount of TV actually being watched by all age groups. This year, TV viewing time is expected to drop an average of 3 percent to 3 hours and 40 minutes, according to eMarketer.
“As viewing time and the number of TV households drop, networks will have to sell ads at higher prices to account for lost viewership,” said Eric Haggstrom, an eMarketer forecasting analyst. “This will become increasingly difficult to do over time. As a result, traditional TV networks such as Disney and NBCU are bulking up their direct-to-consumer [D2C] digital offerings in order to regain lost viewers.”
Although TV providers may suffer from decreasing subscriptions, eMarketer notes that many also often provide broadband internet as part of bundle deals. Without bundle deals, consumers will ultimately end up paying more for internet, which improves profit margins in return.