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Thursday, February 25, 2021

Nolte: Cord-Cutting Hit Record Highs in 2020

More people cut the cable-satellite TV cord than ever before in 2020, which is pretty remarkable when you consider how the coronavirus kept everyone at home for most of the year.

There are now two types of cable TV. The original is what most of us know as cable TV, where the programming comes in via an actual cable. For the sake of this study, this is called a “Multichannel Video Programming Distributor” or MVPD (Comcast, DirecTV, etc.).

The latest version of the MVPD is the “Virtual Multichannel Video Programming Distributor” or VMVPD. This is where you stream the equivalent of cable TV (Sling, DirecTV Now, Hulu Live).

Both the MVPD and VMVPD means you also are hit with a ton of commercials.

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Streaming TV (Netflix, Amazon Prime, HBO Max, etc.) is different. Instead of a MVPD or VMVPD package with dozens of different content providers (Discovery, MTV, Bravo, ESPN, TBS, Disney, etc.), you have one content provider — the streaming service itself — and in most cases, if you pay a monthly subscription fee, no commercials.

Free streaming channels (IMDB, Roku, Pluto) hit you with the occasional commercial, but nowhere near as many ads as cable.

For the sake of simplicity, going forward I will refer to MVPD and VMVPD as cable TV.

Thankfully, cable TV is dying. Not as fast as I would like, but it is dying, and its pace of death is accelerating.

During 2020, cable TV lost a net 3.1 million subscribers, the worst year ever recorded. As of now, only 66.8 million households subscribe to MVPD, a drop from 84 million in 2016.

That MVPD drop of 18.2 million over four years has not been filled with VMVPD subscribers, of which there are only 11.7 million.

In 2016, there were 86.1 million cable TV subscribers (MVPD + VMPVD), today there are only 78.5. That’s a ten percent (give or take) drop in just five years.

Even that doesn’t tell the whole story. MVPD subscribers are paying around $100 a month. VMVPD subscribers are paying less than half that, which means Hollywood is making a lot less money because it’s Hollywood that makes a fortune off your cable bill, not just the cable TV provider.

Here’s how it works…

As you all know by now (I’ve been writing about this for more than a decade), cable TV is a racket, a con game, a way to convince suckers to pay for hundreds of channels they never watch. The reason your monthly cable bill is $100.00 is because you subsidize networks you never watch. If CNNLOL is a part of your cable package, even if you never watch it, CNNLOL gets a direct piece of your monthly cable bill payment. CNNLOL (and a bunch of other low-rated channels) make something like a billion — with a “B” — dollars a year from cable TV subscribers who never watch them.

How’s that for a scam?

As of right now, cable TV is the one-legged stool holding up failed outlets like CNNLOL, channels that could never succeed if revenue was based solely on merit, which meant ad revenue based on ratings.

Cable TV sucks. You’re not only paying a fortune to subsidize people who hate you, you are paying a fortune to watch 20 minutes of commercials every hour.

Thankfully, millions and millions are cutting the cable cord every year. Not only are subscription streaming outlets like Netflix much cheaper, there are no ads.

Better still, more and more streaming outlets are completely free. These services include ads, but about a third as many ads as cable TV.

Pluto TV is a perfect example of what I see as the future of free streaming: hundreds of free channels in a single place. You really should check it out. If you like DIY, history, classic movies, classic TV, documentaries, music videos, British TV, reality TV, celebrity TV, news, true crime, animal shows, comedy channels, it’s all on Pluto … and it’s all free.

In every possible way, streaming is going to continue to grow by leaps and bounds as cable TV, which is both a rip-off and a relic, slowly dies off.

We are returning to merit-based TV, where eyeballs actually matter. For decades, cable TV was the only game in town, which is how you were blackmailed into paying for channels you didn’t want or watch.

Those days are coming to an end, an end that I believe will accelerate even more in the coming years.

Cut the cord, America.


Follow John Nolte on Twitter @NolteNC. Follow his Facebook Page here.


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