For the first time, traditional pay-TV subscribers are about to be outnumbered in the U.S. by viewers using streaming and other video content deilvery services.
By the end of this year, the number of U.S. pay-TV subscribers is expected to decline 10.2%, to 121.1 million, while non-pay TV customers are expected to increase 12.5%, to 144.1 million, according to research and data firm Insider Intelligence.
II defines traditional pay-TV viewers as those who subscribe to live TV packages delivered via cable, satellite or telco providers, with virtual MVPDs like YouTube TV excluded. Non-pay-TV subscribers are the sum of cord cutters plus cord nevers.
By 2027, the forecast estimates that 182.4 million Americans will be using non-pay TV services, while the number of cable TV users will dwindle to just about half that number: 91.3 million.
“Regardless of how one defines pay TV, there is an unmistakable attrition in the number of people who are willing to pay upwards of $100 a month for a live TV bundle,” Paul Verna, vice president of content at II, said. “The cord cutters have won.”
Verna notes that as a result of this reality, cable TV providers are starting to strike bundling deals with streaming services.
“The second-biggest cable TV provider in the U.S., Charter Communications, essentially acknowledged this during its recent carriage dispute with Disney,” he said. “Other top pay-TV providers like Comcast and DirecTV will also need to accelerate their transitions from traditional pay TV to internet delivery to support the migration to streaming.”
Another new analysis, from the GlobalData research firm, offers somewhat different numbers but the same core conclusions.
GlobalData reports that traditional pay-TV subscribers have plunged from more than 85% of U.S. households in 2010 to 42% this year—and forecasts a further drop to just a third of households by 2028.
“Younger generations tend to adopt new technologies and services like video streaming, but an additional element of the cord-nevers is the emergence of the ‘generation rent’ phenomenon,” observed Jesús Romo, an analyst at GlobalData. “Younger consumers who are priced out of the housing market and rent for longer periods may prefer more flexible entertainment options that do not require a physical installation, are generally unbundled, and allow them to cancel and resubscribe.”
Overall U.S. pay-TV revenue is projected to decline from $80.8 billion this year to $63.6 billion by 2028.
Cable providers are expected to claim a more dominant share of the shrinking market, although it remains to be seen whether their investments in high-speed internet services and efforts to partner with streaming services will pay off.
Another recent forecast from Ampere Analysis, which focused on the global picture, concluded that in 2024, global pay-TV penetration will decline for the first time.