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The Netflix Effect: Fewer viewers are opting to sign up for cable in the first place

Cable TV Vs Netflix

With good reason, cable providers are worried that an increasing percentage of viewers are opting to cut the cord in favor of streaming services from the likes of Netflix and Hulu. Arguably more worrisome, however, is the fact that there are a growing number of users who are opting not to sign up for cable in the first place.

In other words, while cable providers are frantically trying to figure out ways to keep viewers from leaving the fold, they might want to spend a little bit more time convincing consumers that a $60-$100/month cable contract is worth it.

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According to a recent Forrester Research study cited by The Wall Street Journalabout 18% of the U.S. population have never signed up for cable TV. In fact, the study reveals that among viewers between the ages of 18 and 31, the number of viewers who aren’t subscribing to cable at all is now greater than the number of viewers opting to cancel their cable.

Clearly, cable companies are feeling the pinch from both sides. Not only are they having problems keeping viewers, they’re apparently having problems attracting new subscribers as well.

Forrester dubs that younger subset of people who have never had a pay-TV subscription “digital cord-nevers.” In general, nearly half of digital cord-nevers use Netflix and YouTube, Forrester said.

“While older cord-nevers understood that they would have to live without access to some of the best programming by forgoing pay-TV service, younger digital cord-nevers have grown up believing that they can have all of the TV they want without paying a traditional TV distributor for it,” Forrester analyst James McQuivey writes in the report.

Going forward, it’s not outlandish to assume that this dynamic will only become more pronounced as services like Netflix, HBO, Hulu, and Amazon continue to double down on original content. What’s more, once Apple gets into the mix with its own TV subscription service — rumored to be launching in 2016 — the situation may quickly become dire for cable companies. Remember, Apple is reportedly trying to secure a $40 pricepoint for its own subscription service, a price that’s far lower than most cable packages out there.

Looking out even further ahead, the Forrester study anticipates that only 50% of all TV viewers by 2025 will consume content via traditional cable TV.

Notably, this isn’t the first time we’ve seen bold predictions about the increasing popularity of cord cutting. The following chart, which we highlighted just last week, illustrates how cumulative cable subscriptions have slowly trended downwards over the past few years while Netflix subscriptions have skyrocketed.

A life long Mac user and Apple enthusiast, Yoni Heisler has been writing about Apple and the tech industry at large for over 6 years. His writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and most recently, TUAW. When not writing about and analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions, the most recent examples being The Walking Dead and Broad City.

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