Maybe cable TV isn't really doomed after all
Since 2010, more than 3 million U.S. households have canceled their cable-TV subscriptions, with many of those consumers opting instead for online video streaming services offered by companies like Netflix (NFLX), Hulu Plus or Amazon (AMZN).
Millennials, those 18- to 34-year-olds, are especially moving away from increasingly expensive cable subscriptions in favor of online viewing. According to a new report from Leichtman Research Group, the mean monthly bill for pay-TV service currently comes in at $99.10, an increase of 39 percent since 2010.
Still, it appears that cable TV isn't going away just yet. Leichtman Research's recent phone survey of more than 1,200 adults across the U.S. found about 83 percent of all households subscribe to some form of pay-TV service. And while that percentage is down from the 87 percent recorded in 2010, it's still higher than 2005's 81 percent.
According to Leichtman, a big factor in those evolving cable-TV numbers appears to be the growing number of U.S. residents who are renting homes and apartments. It noted that 23 percent of renters don't subscribe to a pay-TV service, the largest number of nonsubscribers in nearly a decade, compared to 12 percent of nonsubscribing homeowners.
Bruce Leichtman, the group's president and principal analyst, said the pay-TV industry's rapidly changing dynamics are the result of consumers both entering and exiting the ranks of subscribers.
"Historically, consumers have gone in and out of the pay-TV category, primarily for economic reasons," he said in a press statement.
"While the rate of those leaving is actually similar to a decade ago," he said, "those who are entering or reentering the market has decreased over time, and the industry is not keeping pace with rental housing growth."
And while millennials may not be watching their favorite programs via traditional TV, they are very enthusiastic TV content watchers. A Horowitz Research report issued earlier this year found 28 percent of millennials reported regularly watching content via premium networks. That's more than twice the rate reported by people ages 35 and older.