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Cord-cutting has continued to climb, unraveling the traditional TV bundle and pressuring sports rights-holders to follow audiences to streaming. Now, at a time when media companies are pulling back on other content spending, they鈥檙e spending more on sports. The reasoning? Sports viewership is predictable鈥攁nd produces a big return. More wins for advertisers.

Without the potential for bundling that a service like Hulu has, Roku will have to do a lot to get cord-cutting consumers to jump aboard.

Digital pay TV services have slowed cord-cutting somewhat. Digital pay TV services have grown from 700,000 US households in 2015鈥攚hen Sling TV was launched鈥攖o 17.8 million households in 2024. Digital pay TV will account for one-fourth of total US pay TV subscribers in 2024. These services have attracted cord-cutters as well as cord-nevers.

Still, cord-cutting and digital attribution issues certainly make it easier to justify cuts.

Cord-cutting will limit the strike鈥檚 viewership impact when compared with previous TV labor stoppages. However, the strike鈥檚 stoppage of US scripted productions has ramifications. Streaming services are less affected than TV networks. Services like Netflix produce shows many months before they air, so a short strike will be unnoticeable.

CTV time is also racing ahead of its analog counterpart as cord-cutting rages on. These trends aren鈥檛 new, but our forecasts show recent or imminent tipping points that leave no doubt as to where things are headed. The pivot to profitability has implications.

In previous years, TV networks recouped cord-cutting losses by raising ad prices. Even during low inflation years, it wasn鈥檛 unusual for TV CPMs to jump double digits YoY. Cord-cutting continued raging but price increases couldn鈥檛 prop up viewership losses during negotiations. The scatter market could pick up.

As cord-cutting continues and CTV adoption soars, the powerful performance marketing capabilities of this growing channel will play a greater and greater role in shaping the future of TV advertising.

Pay TV prices have increased, but cord-cutting has been so drastic that traditional pay TV subscription revenues continue to shrink between 6% and 7% per year. Among pay TV providers, satellite has been hit hardest. The declines in pay TV aren鈥檛 equally spread out. In 2024, subscription revenues will shrink by 4.1% for cable, 6.4% for telco, and 11.5% for satellite, per our estimates.

Cord-cutter households will surpass 4 million in 2023. Defined as former traditional pay TV subscribers who canceled in favor of streaming, the number of cord-cutters in Canada will be 8.6 million this year. That鈥檚 up from 5.1 million five years ago. Cord-nevers will reach 4.5 million this year.

Why it matters: Venu Sports represents a significant shift in the sports streaming landscape, aiming to capture the attention of cord-cutters who have moved away from traditional pay TV. With a comprehensive package of live sports, the service targets a market segment willing to pay for sports-centric content at a lower cost.

That鈥檚 because political and live-event programming continue to drive cable revenues, distinguishing Fox from peers facing more significant cord-cutting pressures. Fox鈥檚 revamped ad sales structure sets the company up for increased revenue growth and should help it capitalize on cross-platform advertising opportunities through sports, Tubi, and news positions.

The CTV boom: Record cord-cutting and increased time spent has made CTV one of the strongest ad spending sectors in 2023. But while viewership has made gains, ad spending has shifted over from TV more slowly, giving video competitors time to race to win market share. US CTV spending will total $25.09 billion compared with TV鈥檚 $61.31 billion.

The cord-cutting trend continues. By the end of 2027, US households without any form of pay TV will outnumber those with some form of pay TV. In this comparison, pay TV includes both traditional pay TV and digitally delivered services known in industry parlance as virtual multichannel video programming distributors (vMVPDs). The revolution will be connected.

Many cord-cutters or cord-nevers turned to streaming to help counteract the high costs of cable subscriptions, only to find the ad-free prices quickly adding up. Now they have more price-efficient options, even on their favorite premium channels. One place this is evident is in the increasing popularity of FAST (free ad-supported streaming TV) channels.

Cord-cutters are trying to get away from bundling; that is, paying more for programming they don鈥檛 care for. In many ways, WBD is trying to do just that: (eventually) charging users more for a secondary library of content they may not consume鈥攚hile simultaneously taking some content off the platform and licensing it to the likes of Roku and Tubi.

Increased cord-cutting has been a death knell for regional sports. Diamond Sports Group, a Sinclair-owned portfolio of regional sports networks, declared bankruptcy in March after cord-cutting cut into its viewership and its streaming offering Bally+ failed to take off.

鈥淐辞谤诲-肠耻迟迟颈苍驳 is happening at a tremendous rate,鈥� he added, amounting to 233.9 million people鈥攐r 68.4% of the population. Digital pay TV, however, which includes services such as YouTube TV and Sling TV, is slowing down the trend, but only slightly.

Football fans will have cheaper access to the Ticket if they are YouTube TV subscribers, and this will draw in as many as 2 million cord-cutting sports viewers. vMVPDs remain the smallest OTT players overall, however, thanks to their high cost. Note that these projections are not akin to the various companies鈥� self-reported subscriber or user numbers.

Rather than getting users who have become accustomed to a decade of ad-free streaming to jump on the ad-supported train by axing cheap subscription options and cracking down on cord-cutters, Amazon is simply making ad-supported streaming the default for all Prime members. To avoid ads, users will have to pay an extra $2.99 monthly.

Many cord-cutters want an experience like traditional TV, with continuous content and ads serving as background noise during tasks like ironing. This "lean away TV" approach lets viewers look away without missing key plot points. Our take: As Google continues to expand its CTV presence, it faces competition from players like Amazon and Roku.

These include economic uncertainty, falling ratings, cord-cutting, downward pricing pressures, shifts in viewership from TV to CTV, and migration of ad dollars from traditional to digital media. Despite the drop, the upfronts make up a growing portion of the TV ad market. Roughly 30% of total TV ad spending will happen during the upfronts, a portion that has inched up over the past five years.

Continual cord-cutting is reducing linear TV ad spending, which in turn reduces upfront linear commitments. Upfront linear TV ad spending peaked in 2022 and the decline shows no signs of reversing. Upfront linear TV spending is declining in tandem with total linear TV ad spending. Between 2021 and 2024, US linear TV ad spending had a negative 3.5% CAGR.

With the steady drumbeat of cord-cutting looming over the industry, streaming鈥攁nd programmatic鈥攚ill play a bigger role than ever in this year鈥檚 negotiations. Advertisers will use conversations started last year as a springboard to incorporate more programmatic spending into their upfront deals. By the end of 2024, more than 4 in 5 new CTV ad dollars will transact programmatically, per our forecast.

Free from outdated broadcasting constraints, streaming apps are absorbing billions in ad budgets, targeting cord-cutting audiences and premium content environments. However, this explosive growth brings familiar challenges. Rampant fraud and opaque ad placements are beginning to encroach on what was once considered a safe haven from controversies plaguing social media feeds and user-uploaded content.