In 2015, 4.9 million U.S. households will have dropped traditional linear TV subscription services, according to eMarketer. Perhaps the most-notable 2015 was the rapid deceleration of linear TV subscription service growth.
That is not yet a significant percentage of total U.S. homes, but the rate of abandonment is increasing. Cord cutting rates were higher by nearly 11 percent in 2015, year over year, and is projected to accelerate.
If the eMarketer figures prove correct, then we might still not be at an inflection point, where the rate of change goes non-linear, even by 2019.
One key difference between the two groups: 70 percent of consumers who want to spend more say “live” TV is “very important” or “important.” Of consumers who say they would prefer to spend less, 50 percent say live TV is very important or important.
Some 21 percent of U.S. consumers would prefer to spend less on their linear TV services, according to GfK MRI.
Those defectors represent 49 million potential lost accounts, according to GfK MRI study.
About 22 million people (nine percent) want to spend more.
One key difference between the two groups: 70 percent of consumers who want to spend more say “live” TV is “very important” or “important.” Of consumers who say they would prefer to spend less, 50 percent say live TV is very important or important.
The important observation, however, is the importance of the inflection point. When that point is reached, linear service abandonment rate will skyrocket, in a very short amount of time.
Contestants not in position for the change will not survive, as there will be no time to build a next-generation offer from scratch, once the inflection point is reached.
At least for the moment, we remain in a period of quantitative changes that precede the inflection point. Then the market changes will be qualitative.
In other words, the winners are getting into position now. That is likely why AT&T soon will announce the creation of its own mobile video streaming service, and why Verizon already has done so.
While there is no guarantee of success, the market's eventual winners will emerge from the contenders ready to scale fast, when the moment for a change to a post-linear market arrives.
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