Cord cutting was so bad last year that pay-TV penetration is down to 1994 levels

Crank up the Weezer and throw yourself a My So-Called Life watch party tonight, because the cable-TV industry just hit a totally retro milestone.

Cord cutting accelerated at such a rapid pace last year that the penetration of U.S. households paying for traditional TV services is down to levels not seen since the mid-1990s, according to a new report from analyst firm MoffettNathanson.

Over the course of 2020, cable and satellite TV companies shed 6 million subscribing households, the firm estimates, a decline of 7.3%.

And the rise of cable-like streaming services—such as Sling, YouTube TV, and Hulu’s live TV service—has not been dramatic enough to make up the difference, since only about one-third of cord cutters subscribed to an over-the-top equivalent.

MoffettNathanson estimates that cord cutting fell 4.4% last year even with cable-like streaming services factored in. “The media industry just suffered the worst year ever for cord-cutting, whether measured only among traditional distributors or after including vMVPDs,” the analysts wrote.

Penetration of pay-TV services was down to about 60% among residential U.S. households, compared to closer to 90% only a decade ago. Total pay-TV penetration including commercial customers was down to 61%. “[R]emarkably, we haven’t seen this since before the launch of the first satellite TV service, DirecTV, in 1994,” the analysts wrote.

Cord cutting is not a new problem for cable operators, but the coronavirus pandemic seems to have exacerbated it. One reason for that was the cancellation of so many live sporting events last year, which left many consumers with one less reason to pay for cable TV. Although MoffettNathanson’s report notes a slight uptick in subscriber trends for the third and fourth quarters, the broader shifts in viewing habits are seen as permanent.