Cord-cutting

Based on Wikipedia: Cord-cutting

The Great Unbundling

In the first quarter of 2019, cable and satellite companies in the United States watched 1.4 million customers walk out the door. Not to a competitor. Just out. These people weren't switching providers—they were abandoning the entire model of paying for packaged television channels delivered through a cable or satellite dish.

This exodus has a name: cord-cutting.

The term captures something almost physical about the act—the satisfying snip of severing a connection that had tethered households to monthly bills of a hundred dollars or more for decades. And by 2022, the cord-cutters won. For the first time in history, fewer than half of American households subscribed to cable or satellite television.

How Television Used to Work

To understand cord-cutting, you need to understand what came before it. For most of the late twentieth century, if you wanted television beyond the handful of free broadcast channels you could pick up with an antenna, you had exactly one option: pay a cable company.

These companies operated what's called a multichannel video programming distributor, or MVPD for short—essentially a middleman that bundled together dozens or hundreds of channels into packages. You couldn't pick and choose. If you wanted ESPN, you also paid for the Home Shopping Network. If you wanted HBO, you got a dozen channels you'd never watch.

This bundling was enormously profitable for the cable companies and the channel owners alike. It was also enormously frustrating for consumers who felt trapped into paying for content they didn't want.

The Internet Changes Everything

The Internet didn't immediately threaten cable television. In its early years, bandwidth was too limited to stream video reliably. But as broadband connections became faster and more widespread, a new category of service emerged: over-the-top content, abbreviated as OTT. The name refers to the way these services go "over the top" of your existing internet connection rather than through a dedicated cable or satellite infrastructure.

Netflix, which had started in 1997 as a DVD-by-mail service, launched streaming video in 2007. Hulu followed in 2008. These services offered something revolutionary: access to substantial libraries of content for a flat monthly fee that was a fraction of a cable bill.

The transformation was gradual at first. In 2008, Parks Associates estimated that only about 900,000 American households relied entirely on the Internet for television. That number sounds almost quaint now. By 2017, it had exploded to 22.2 million households.

The Skeptics Had a Point—For a While

For years, industry analysts dismissed cord-cutting as overblown.

Craig Moffett, a widely followed media analyst at Sanford Bernstein, called it "perhaps the most overhyped and overanticipated phenomenon in tech history." He had reasons for skepticism. In 2010, 88 percent of American households surveyed by The New York Times and CBS News had pay television, and only 15 percent were even considering switching to internet-only viewing.

The skeptics pointed to a fundamental problem: sports. If you wanted to watch your local team play, or follow the NFL, or catch March Madness, you almost certainly needed cable. Sports rights were locked up by cable networks like ESPN, and streaming options were limited or nonexistent. For many households, giving up cable meant giving up the games that brought families and friends together on weekends.

Live programming more broadly posed challenges. Cable let you watch events as they happened. Early streaming services were built around on-demand libraries—great for catching up on a series, useless for following breaking news or watching the Oscars.

The Demographics Told a Different Story

But dig into the numbers, and warning signs were everywhere for the cable industry.

People under 45 were four times more likely than older viewers to consider going internet-only. A survey in 2010 found that more than half of the people planning to cancel cable were under 40. They had higher education levels. Many earned comfortable incomes of $50,000 or more—this wasn't about poverty, it was about choice.

These younger viewers had grown up differently. They were accustomed to finding entertainment on their computers. They didn't see why they should pay over a hundred dollars a month for hundreds of channels when they could pay ten dollars for Netflix and another ten for Hulu and still come out vastly ahead.

And then there were the cord-nevers.

A Generation That Never Plugged In

In November 2011, Credit Suisse analyst Stefan Anninger coined a term for a new phenomenon. He called them "cord-nevers"—young people who had never subscribed to cable television in the first place and likely never would.

This wasn't a transition. This was a generational break.

Anninger drew a parallel to landline telephones. Industry observers had long assumed that young people would eventually get landlines when they "settled down." Instead, an entire generation simply never did. Mobile phones were enough. The landline became a relic.

Richard Schneider, whose company Antennas Direct sold television antennas online, reported something even more striking. Some of his prospective customers knew about Netflix and YouTube but didn't realize that free broadcast television even existed. The idea of picking up ABC or NBC with an antenna was foreign to them—not because it was outdated, but because it had never been part of their world.

In 2012, Time Warner CEO Jeff Bewkes dismissed cord-nevers by saying they "didn't see anything worth paying for." He meant it as an insult. It turned out to be an accurate description of a growing sentiment.

Death by a Thousand Cuts

2010 marked the first year that pay television experienced quarterly subscriber declines. The industry had grown every single quarter before that. Now, for the first time, the direction reversed.

The losses seemed manageable at first—a few hundred thousand subscribers here and there out of more than 100 million total. Comcast lost 625,000 subscribers in 2010. Time Warner Cable and Charter Communications saw their numbers slide. But the industry as a whole could point to modest growth in some quarters and argue that reports of its death were exaggerated.

Then came 2013. For the first time, the thirteen largest multichannel video providers—covering 94 percent of the market—experienced year-over-year subscriber losses. Not just quarter-to-quarter fluctuations. An actual annual decline. Cable lost 1.5 million subscribers, with Time Warner Cable shedding 553,000 and Comcast losing 359,000.

Analyst Bruce Leichtman, who had tracked the industry for years, described the subscription television market as "saturated." It had hit a ceiling around 2011 at roughly 101 million households. By 2017, that number had fallen below 95 million.

The peak was behind them. The decline was real.

The Cord-Shavers: Cutting Back Without Cutting Off

Not everyone who grew dissatisfied with cable abandoned it entirely. A middle ground emerged: cord-shaving.

Cord-shavers kept their cable subscriptions but downgraded to cheaper packages with fewer channels. They complemented their slimmed-down cable with streaming services, getting the best of both worlds—sports and live programming from cable, everything else from Netflix and its competitors.

In the United Kingdom, 36 percent of streaming subscribers reported downgrading their premium cable packages. Another practice emerged called cord-stacking, where households maintained both traditional pay television and streaming subscriptions. A remarkable 71 percent of UK streaming subscribers stacked their services this way, often because streaming still couldn't deliver elite sports coverage.

For the cable industry, cord-shavers represented a warning. Today's cord-shaver was tomorrow's cord-cutter. Once someone grew comfortable relying primarily on streaming, the leap to canceling cable entirely became smaller.

The Incumbents Try to Adapt

The traditional television providers weren't passive. They saw the trends and attempted to respond.

Cable companies began allowing subscribers to stream programs on computers, laptops, and tablets—a feature called TV Everywhere. The idea was to make cable more flexible, meeting customers where they already were. If you couldn't beat the streaming services, perhaps you could become one.

Some providers launched internet-only packages specifically targeting cord-cutters. Cablevision created "Cord Cutter" bundles that included a free digital antenna, access to its WiFi network, and the option to add HBO's streaming service. Comcast tested a "Stream" service delivering broadcast networks and HBO over its internet infrastructure.

Time Warner Cable went further, giving some subscribers a Roku digital media player—the same device people used for Netflix—preloaded with an app to access their cable service. A spokesperson emphasized this was "the same TV and same packages," just delivered differently. It was an acknowledgment that the old model of a cable box connected to your television was becoming obsolete.

The Content Owners Join the Revolution

Something interesting happened as cord-cutting accelerated: the companies that made television content decided to cut out the middleman.

HBO, the premium channel famous for series like The Sopranos and Game of Thrones, had always been available only through cable or satellite providers. In 2015, it launched HBO Now—a standalone streaming service anyone could subscribe to directly. You no longer needed a cable subscription to watch HBO.

CBS followed with CBS All Access (later renamed Paramount+). CEO Les Moonves hinted strongly that the company's other major network, Showtime, would do the same. It did, within months.

Then came the deluge. Disney launched Disney+. NBCUniversal created Peacock. WarnerMedia (the company behind HBO) introduced HBO Max, an expanded streaming service. ViacomCBS built out Paramount+. Each major media conglomerate rushed to establish direct relationships with consumers rather than rely on cable companies as intermediaries.

Sports networks, long the cable industry's strongest defense, began to crack as well. In 2016, Sportsnet in Canada launched its own streaming service. The logic that had kept viewers tethered to cable was weakening.

The Ironic Twist: Have We Come Full Circle?

By 2019, media critics began pointing out something uncomfortable. The streaming revolution that promised liberation from expensive cable bundles was starting to look a lot like... expensive cable bundles.

The problem was fragmentation. Disney pulled its content from Netflix to launch Disney+. NBCUniversal took The Office, one of Netflix's most-watched shows, for its own Peacock service. Warner reclaimed Friends for HBO Max. Each studio viewed exclusive content as a competitive weapon.

For consumers, this meant a difficult choice. Want to watch Marvel movies? You need Disney+. Interested in HBO's prestige dramas? That's HBO Max. Following your favorite NBC shows? Time to subscribe to Peacock. Add Netflix for its originals, Amazon Prime for its exclusives, maybe Hulu for shows that air on ABC and Fox.

Suddenly a cord-cutter might be paying $50, $60, $70 or more per month across multiple streaming services. The total crept closer and closer to what a cable bill used to cost. And instead of one interface and one remote, viewers now juggled half a dozen apps with different designs, different search functions, and content that shifted unpredictably from one service to another.

Some critics argued that consumers were worse off than before. At least cable bundled everything in one place. Now finding a specific show required detective work, and popular programs might vanish from one platform to reappear on another with no warning.

The frustration led some people to a solution as old as the internet itself: piracy. If legal streaming had become complicated and expensive, illegal sources offered everything in one place for free.

A Global Phenomenon

While the numbers cited here focus heavily on the United States, cord-cutting is not an American phenomenon. Across Europe and Asia, between 7 and 15 percent of households had cut the cord by the late 2010s.

In 2024, the trend reached Argentina in dramatic fashion. The country's severe economic crisis—one of the worst in its history—forced households to make difficult choices about discretionary spending. Cable subscriptions, suddenly an unaffordable luxury, began declining for the first time. Providers like Flow and Telecentro watched subscribers disappear as families prioritized more essential expenses.

The Argentine case illustrates something important: cord-cutting can be driven by choice or by necessity. In wealthy countries, it often reflects preferences—younger generations simply don't value traditional television. In struggling economies, it reflects constraint—families who might want cable can no longer afford it.

The Technology Factor

One detail made cord-cutting easier with each passing year: television sets themselves changed.

By the end of 2017, most new televisions came with built-in internet capability. These smart TVs could run Netflix, Hulu, YouTube, and dozens of other apps without any additional hardware. The streaming devices that had once been necessary purchases—Roku boxes, Apple TVs, Amazon Fire Sticks—became optional for anyone buying a new television.

This removed friction. A household no longer needed technical knowledge to set up streaming. They didn't need to buy extra equipment. They just needed WiFi and a subscription. The path from "I'm curious about Netflix" to "I'm watching Netflix" became as simple as clicking a button on the remote.

What the Research Shows

A comprehensive 2021 study quantified exactly what happens when a household cuts the cord. These former cable subscribers increased their internet usage by 22 percent—they were watching more online content, not less content overall. They reduced their payments to traditional cable and satellite providers by 50 percent, a dramatic savings. And 16 percent picked up new streaming subscriptions they hadn't had before.

The picture that emerges is not of people abandoning television. It's of people watching television differently—and paying significantly less for the privilege.

Where Things Stand

The cable industry's worst fears came true, and then some. What was once dismissed as hype became an irreversible transformation. Traditional pay television, which seemed invincible in 2010, became a minority pursuit by 2022.

But the streaming services that displaced cable now face their own reckoning. They're raising prices. They're cracking down on password sharing. They're introducing advertising tiers. They're consolidating through mergers. In short, they're starting to behave like the cable companies they replaced.

The technology changed. The business pressures didn't.

For consumers, the lesson may be that no revolution delivers permanent victory. The bundled cable package gave way to à la carte streaming, which is slowly giving way to rebundled streaming packages. The names change. The logos change. The underlying economics—content costs money, and someone has to pay—remain constant.

What did change, permanently, is consumer expectations. Having experienced the flexibility of choosing exactly which services to subscribe to, most viewers will never accept being told they must take a package of 200 channels to get the ten they actually watch. That expectation of choice, once established, doesn't disappear.

The cord, once cut, doesn't get spliced back together.