Netflix. Disney Plus. Hulu. Paramount Plus. Peacock. If you’re tired of paying for more and more streaming services, you’re not alone. Increasingly, consumers suffering from subscription fatigue are left dreaming of the days when they just had one cable bill – and the package came with local news, movies, kids’ programming and live sports. Depending on how many digital media subscriptions someone has, the cable bill may have been lower.
But now people who previously cut the cable cord are plugging back in, and that’s good news for advertisers.
Cutting the Cord
The number of U.S. adults who pay for cable TV has plummeted in recent years. Since 2014, 20 million TV watchers – most in that coveted 18- to 29-year-old demographic – have “cut the cord” on cable or satellite TV; 5 million viewers cut the cord in 2020 alone. And eMarketer estimates 80 million U.S. households will have cut the cord by 2026.
In contrast, an estimated 86% of American households will have at least one streaming subscription by 2027, and most have more. The average household watching on over-the-top (OTT), or connected, TV has 4.37 subscriptions.
Although most cord-cutters say they dropped cable because it was too expensive, more than a third of U.S. households pay for both cable and at least one streaming subscription.
A media trends survey of cable TV subscribers earlier this year showed nearly half had reconnected after previously cutting the cord. Why? Most cited being able to watch live sports and live entertainment events, followed by cable being part of a bundle with their provider.
Advertising on Cable
TV viewers returning to cable presents an interesting opportunity for advertisers. A franchisee or franchise co-op group might pay $1,200 to $10,000 per commercial spot in primetime on a local broadcast channel, depending on the market. But on cable networks, the price could drop to $50 during a specific time or show – or as low as $3 per spot if the advertiser is flexible about when their commercial airs.
Of course, franchise advertisers can target their customers by demographic, genre and location (but not specific show) on OTT. Cost is calculated like a digital product and based on CPMs (cost per thousand). Depending on the budget and the goal of the campaign, the advertiser can target very closely by demo or genre, or they can be more flexible to maximize impressions.
Commercials on OTT air whenever a customer in the designated demo or market tunes in, so the old-school strategies of placing ads within a daypart or program are no longer valid. However, streaming subscribers can also opt to pay more to watch their favorite shows without ads.
Cord cutting may not have worked out perfectly for consumers who were just interested in saving money. But their move to reconnect offers a host of new opportunities for franchise brands that are interested in reaching those consumers through affordable cable TV advertising. As an added bonus, advertisers can still target by demo or genre the consumers watching shows on OTT. Because so many cable subscribers also pay for streaming packages, brands have more options than ever to reach their target audience.
