Commentary

Traditional Pay-TV Households Drop Below 50%, vMVPDs Inch Up To 15%

Fewer than half (49%) of U.S. TV households now have a traditional cable, satellite or telco pay-TV service — down eight points, from 57%, in 2021, and down from 74% in 2018.

Meanwhile, 15% of households pay for virtual multichannel video programming distributors/vMVPDs. That’s up by just one point from 2021's 14%, although up 11 points from 4% in 2018.

Overall, 64% of households pay for any of these forms of TV service — down from 66% last year, 79% in 2017, 88% in 2012 and 85% in 2007.  

That’s according to Leichtman Research Group’s latest annual Pay-TV in the U.S. study, based on a survey of 1,769 TV households.

The decade-old decline in pay-TV subscriptions has accelerated in the past five years, with the non-subscribers “cobbling together a viewing experience that works for their households, with streaming at the core,” Bruce Leichtman, the group’s president and principal analyst, notes to Advanced TV Insider. This includes the major services that offer both ad-free/SVOD and ad-supported/AVOD services, of course.

But non-subscribers to pay TV are also somewhat more likely to use free, ad-supported/FAST services and over-the-air (OTA) antennas, he reports. About 14% of non-pay-TV subscribers stream FAST services daily, compared to 12% of pay-TV subscribers.

Fourteen percent of TV households have an antenna and no pay-TV service (OTA only) — the same percentage as last year, and up very little from 2018’s 13%. Overall, 7% of TV households are non-pay-TV subscribers who use a TV antenna to watch broadcast TV daily, and about 10.5% watch at least weekly.

The survey confirms once again that the penetration of pay TV remains lowest among younger adults and categories that they tend to dominate, including movers and renters. 

Today, 56% of those between 18 and 34 have pay TV, compared to 83% a decade ago.

But pay-TV subs are also down among those 45 and older: now at 70%, versus 88% in 2023.

The mean age of traditional pay-TV subscribers is 49.3, compared to 42.5 among non-subscribers and 40.8 for vMVPD-only.

Among those who never had a pay-TV service, 63% are between 18 and 34, compared to 24% of former pay-TV subscribers.

A third of non-subscribers last had a pay-TV service within the past three years, 37% last had one more than three years ago, and 30% never had one.  

Nearly half (48%) of those who moved in the past year do not currently have a pay-TV service – a higher level than in any previous year.

Forty-two percent of renters, compared to 33% of homeowners, don’t have a pay-TV service.

To underscore once again what’s pushed growing numbers to abandon pay TV in favor of streaming, the mean reported spending per month across all pay-TV subscribers is now $112.70: 5% higher than in 2018.

To be fair to vMVPDs, however, a new J.D. Power survey just found that the cost for live TV streaming averages $69 per month, versus $113 per month for cable and satellite.

Also, a new LG Ads study found that monthly spending on streaming apps now averages $62, versus $95 for linear TV bundles.

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