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Cable vs Streaming: 2016 Turning Point?

Friday, December 1, 2017

We might be at the turning point. In 2016, growth in spending on cable/satellite television service came to a halt, according to a “Demo Memo” analysis of the Bureau of Labor Statistics' Consumer Expenditure Survey. The average household spent $764 on the service in 2016 – the same as in 2015, after adjusting for inflation. This isn't the first time cable spending has come to a standstill. It stagnated between 2010 and 2011 too, in the aftermath of the Great Recession, then resumed its climb. This time might be different, with spending declines to come.

Evidence of the turning point is in the eroding customer base. The percentage of households that pay for cable/satellite television service has drifted downward since hitting the peak of 74% during the average quarter of 2010. A smaller 68% of households purchased cable/satellite service during the average quarter of 2016. The drop has been especially steep among younger householders.

Percentage of households spending on cable/satellite service during an average quarter of 2016 (and percentage-point change since 2010)

Under age 25: 32% (-17)
Aged 25 to 34: 56% (-12)
Aged 35 to 44: 68% (-7)
Aged 45 to 54: 74% (-3)
Aged 55 to 64: 75% (-3)
Aged 65-plus: 75% (-3)

According to a recent Pew Survey, only about one in four Americans (28%) watches television primarily through online streaming. Among people under age 30, however, the 61% majority primarily streams. 

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