Report: Cord-Cutting Is Severely Affecting TV Advertising

September 14, 2017 - Written By Joshua Swingle

A new report from eMarketer expects the amount of money spent on TV advertising to increase just 0.5 percent this year. By the end of 2017, the research firm expects a total of 22.2 million people to have cut the cord, a figure that represents a rise of 33.2 percent over 2016. Also, the number of people who have never had pay TV is expected to hit 34.4 million. Because of all of this, it’s predicted that the amount spent on TV advertising in the US will soon start falling in a significant manner.

It’s reported that viewers are switching to various live streaming and over-the-top digital platforms. As well as this, many traditional pay TV operators are also moving towards developing their own streaming networks in preparation for the future which doesn’t look too bright for TV advertising. In fact, eMarketer’s estimates put TV ad spending at $71.65 billion in 2017, an increase of just 0.5 percent over the last year. As well as this, the percentage that TV holds in terms of media spending will drop to 34.9 percent this year and the same figure is expected to be below 30 percent by 2021. Also signaling a decline in pay TV popularity is the fact that the average daily time spent watching TV will drop below four hours for the first time this year, with the figure declining 3.8 percent to 3 hours and 58 minutes. It’s estimated that by 2021, the number of cord-cutters will be on par with the number of people who have never had pay TV, at 81 million, representing 30 percent of the population. On the other hand, the daily viewing time of digital content is booming, with an average of one hour and 17 minutes per day, an increase of 9.3 percent versus 2016.

In 2017, 196.3 million of American adults are expected to watch pay TV, a figure which is down 2.4 percent over 2016, and that decline is expected to continue in the future. Further boosting the popularity of online content is the fact that the number of cord-cutters is expected to rise in all age groups except for those aged 55 and older. With the popularity of online content continually increasing, it remains to be seen whether traditional pay TV services can adapt to the new market conditions in order to retain their customers.