The biggest reason Millennials are canceling their cable subscriptions is because they're getting enough entertainment from over-the-top streaming services like Netflix (NASDAQ: NFLX), Amazon.com (NASDAQ: AMZN) Prime and Hulu. Over half of respondents said they were satisfied with what's available a la carte.
Cable has a few options to combat the rise of over-the-top streaming video services. Many providers have introduced skinny bundles in recent years. Magid Advisor Mike Vorhaus sees skinny bundles as a key part of the solution to keep customers that would otherwise leave.
But skinny bundles suffer a few problems. First, it's really difficult to create a compelling bundle of a few channels since a handful of media companies control the hundred-or-so cable networks. If a cable provider wants one channel, they have to take a whole group of channels from the media company. Moreover, skinny bundles simply focus on price, not the major conveniences of over-the-top services.