PayTV Providers Could Lose $1B From Cord Cutters

Pay-TV providers could lose nearly $1 billion in revenue as 800,000 customers cut the cord during the next 12 months, according to a new study from the firm cg42.

According to The Wall Street Journal, the results, which are based on an online survey of 1,119 U.S. customers, estimates that pay-TV providers could lose about $1,248 per cord-cutter annually. That’s because the average cord-cutter saves $104 a month—about 56% of their bill—from dropping cable TV.

Some analysts say that if consumers ditch cable TV they could wind up paying even more for the combination of stand-alone high-speed internet and streaming services. But the study found the opposite: that going without pay-TV service yields savings. That’s in part because people tend not to spend much more than $15 on streaming services even after cutting the cord.

A “cord-haver” spends about $187 a month on average before cutting the cord, including cable TV, phone, internet access and streaming services. Meanwhile, a typical “cord-never”—someone who never had a pay-TV connection—spends about $71 on streaming services and home internet combined. The average cord-cutter spends $83.

“The consumer is discovering they don’t need the mean, evil cable company to get the content that they want, and they can get it for a better deal,” said Steve Beck, managing partner at cg42.

A $1 billion loss of revenue is small for the entire pay-TV industry, but it is a warning sign.

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