For years, the death of cable TV has been forecast as an increasing number of Americans abandon cable TV in favor of streaming services.
However, marketers’ shift away from traditional TV may kill cable TV and, more significantly, the cable networks it offers.
Many cable TV networks expected streaming to keep advertisers and Americans happy, however streaming services such as MAX, Peacock, Paramount+, and Disney+ have yet to recoup revenue lost due to the drop in cable TV viewership.
More importantly, advertisers are moving away from traditional advertising. According to the Wall Street Journal, when Oreo released its new space-themed cookie, the company spent no money on television advertising, instead promoting it through social media and websites such as Amazon and Walmart.
Madison estimates that traditional TV advertising cost marketers $60 billion in 2016. That figure is expected to fall below $30 billion for standard televisions. This is a major blow to cable TV, as digital TV revenues are expected to fall by about $50 billion by 2025.
The fall in viewing has impacted cable TV networks, but advertisers stepping away has reduced revenue even more.
The continued decline in advertising income has had a greater influence on the future of cable TV than cord cutting. If this pattern continues, a lack of funds may push many tiny cable TV networks to close much sooner than cord cutting alone would. The question now is how quickly advertisers will abandon cable TV.
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