eMarketer Lowers US TV Ad Spend Estimate as Cord-Cutting Accelerates

eMarketer Lowers US TV Ad Spend Estimate as Cord-Cutting Accelerates
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eMarketer has reduced its estimate for US TV ad spending due to faster-than-expected growth in cord-cutting.

This year, US TV ad investment will expand just 0.5% to $71.65 billion, a figure down from the $72.72 billion predicted in our Q1 forecast for 2017. As a result, TV’s share of total media ad spending in the US will drop to 34.9%, and is expected to fall below 30% by 2021.

Consumers shifting their attention to OTT digital video platforms in place of pay TV options, known as “cord-cutters“, is a key reason for anemic growth in TV ad spending. eMarketer has increased its estimates for cord-cutters substantially for 2017 through 2021. In fact, by 2021, the number of cord-cutters will nearly equal the number of people who have never had pay TV.

This year, there will be 22.2 million cord-cutters ages 18 and older, a figure up 33.2% over 2016. The overall tally is much higher than the 15.4 million eMarketer previously predicted. Meanwhile, the number of US adult cord-nevers will grow 5.8% this year to 34.4 million.

Overall, 196.3 million US adults will watch pay TV  this year in the US, down 2.4% over 2016, eMarketer predicts. By 2021, that total will have fallen nearly 10% compared to five years earlier. The number of US pay TV viewers ages 55 and older will continue to rise throughout the forecast period, while every other age group user tallies will decline.

At the same time, US adults are spending less time in front of the TV. This year, the average time spent watching TV (excluding digital) among US adults will drop 3.1% to 3 hours 58 minutes, the first time it has dropped below 4 hours a day.

Digital video consumption, meanwhile, is on the rise. US adults will consume 1 hour 17 minutes of digital video this year, up 9.3% over 2016.