Subscription cancellations will cost the pay-TV industry billions in lost subscription revenue, as cancellations mount.

The consulting firm cg42 projects Over 5 Million U.S. Consumers Will Cut the Cord in 2018.

Cg42 estimates a total of 5.4 million U.S. consumers will cut the cord in 2018, resulting in a $5.5 billion loss in revenue. This compares to 4.8 million in 2017 and 3.8 million in 2016.

“As the process of finding alternative paths to content gets easier and easier, people are acting on the frustrations they have with traditional providers and leaving,” the study’s lead author and cg42 managing partner Stephen Beck told MarketWatch.

Cg42 asked cord-cutting respondents and respondents who had never used a subscription pay-TV service what streaming services they had used in the past three months. Of paid streaming services, Netflix NFLX came out on top, followed by Amazon Prime AMZN and Hulu Plus.

The survey’s publication came hours after Netflix announced it had missed subscriber expectations fore the second quarter. The stock was down 13% Tuesday morning, but analysts stood by the company, saying the pullback was a buying opportunity.

Netflix Leads the Way

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Netflix Buying Opportunity?

Does missing growth expectations constitute a buying opportunity? Heck, I have no idea if Netflix will even survive.

Netflix is bleeding cash badly with no bottom of the hole in sight.


I confess. I never heard of Hulu.

Yet, I figured my wife Liz had heard of it. Her millennial daughter, my stepdaughter, is the clue. Sure enough, she uses Hulu.

We seldom watch TV. "Almost never" is a better description than "seldom".

Not counting listening to oldies stations on TV, at home I average a couple hours a month at most.

I did watch an hour of the world cup soccer final. Before that, I cannot remember. I can go months without watching TV at home. Counting TV viewing while sitting at a bar after golf or when out to dinner, add another hour per week of half-paying attention watching.

Hulu Share by Age Group

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The above charts from Statista.

Given my viewing habits, I would have little reason to know about Hulu. It is still a private company.

Seeking Alpha writer "Showbiz Insider" purports Improving Hulu Will Cause Disney's Stock Price To Spike.

Here is his rationale: "Once Disney acquires Fox, it will have controlling interest in Hulu and the ability to revitalize the aging streaming service."

None of these models excite me but Disney at least has Free Cash Flow.

Disney Free Cash Flow

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​If you make money in one area, you can paper over losses in another. Netflix has lost money every quarter since inception.

Netflix vs Hulu

The Well Kept Wallet asks Which is Better Hulu or Netflix?

The answer depends on your needs. Hulu is US and Japan, at least for now. Netflix is global.

According to their site, “Hulu is the only streaming service that offers a library of the current season hit TV shows, films, full seasons of acclaimed series, premium original programming and clips to subscribers.”

Netflix differs from Hulu in that whereas Hulu offers popular show episodes often within 24 hours of when they air, Netflix focuses more on quantity. You won’t find prime time TV series episodes available nearly as quickly on Netflix as you will on Hulu.

However, Netflix shares thousands of movie and TV offerings – a much larger amount of content than Hulu offers.

Can Netflix Survive?

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In response to Can Netflix Survive? someone suggested Netflix can dramatically hike prices.

What about the competition?

If Hulu or other competitors start a price war, Netflix won't be able to hike rates willy-nilly without losing customers. And what if Hulu goes global?

Mike "Mish" Shedlock

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