Over the past decade, traditional cable TV has faced significant challenges, experiencing a 51% drop in revenue, impacting major players like Comcast and others in the industry. The rise of streaming services has posed a serious threat to cable television, leading to a remarkable shift in viewership trends.
According to Steve Rattner, a former Treasury Official and Morning Joe economic analyst, statistics reveal a drastic decline in cable TV subscriptions. In 2015, approximately 80% of U.S. households had cable or direct-to-satellite broadcasting, but by 2023, this figure has plummeted to only 49%, as streaming services attract more viewers. Over the same period, streaming subscribers surged from 52% to 78%, effectively overtaking cable TV as the dominant force in the entertainment landscape.
This shift in viewership patterns has had a profound impact on the entertainment industry’s revenue streams. The percentage of time spent on streaming platforms has skyrocketed from less than 3% to 37.7%, while broadcast cable viewership continues to decline.
The consequences of this transition are felt across the entire entertainment ecosystem, with pay television, home videos, and movie theaters experiencing significant revenue declines. In contrast, streaming revenues have surged by an impressive $27 billion from 2012 to 2022, while pay television revenues have suffered a substantial loss of $67 billion, roughly half of its previous value.
Amidst this evolution, cable companies are grappling with revenue losses from both dwindling subscribers and advertising income. Additionally, actors and writers are facing challenges with their residuals as more consumers opt for streaming-only services. Broadcast television compensates talents with residuals for each airing of a program, meaning fewer viewers lead to diminished residual payments.
In contrast to broadcast television, streaming platforms pay a lump sum based on the total number of subscribers, rather than the viewership count. Residuals have been a crucial factor for writers, actors, and studios in ongoing negotiations. Union members are pushing for 2% of streaming residuals, while studios argue they cannot afford such demands.