According to a new report from The Diffusion Group, MVPD service penetration will dip during a period of time in which pay TV services will lose 36% of their 2020 subscriber base. This is a significant acceleration from the previous five-year period in which the sector only lost 9.5% of subscribers.
The research outfit’s latest projection actually shows that the decline in legacy MVPD subscriptions has exceeded its worst-case scenario and that cord-cutting in the country has reached a record high.
In 2017, the firm projected a worst case scenario of 83.5 million MVPD households in the US – with the actual total at the end of 2019 totalling 81 million. TDG then modified its expectations to reflect growing cord-cutting, with a low-end prediction of 75.7 million by the end of 2020, though Q2 totals of 77 million suggests that the bottom could once again be exceeded.
TDG estimates that 25% of US broadband households are inclined to cancel their pay TV service, with 13% saying that they are moderately likely or definitely doing so. This translates to 14 million US homes likely to abandon pay TV, leaving less than half of US broadband households subscribed to an MVPD service.
Michael Greeson, president and principal analyst at TDG said: “These video nomads have a very different concept of home video than their predecessors – one that costs less and includes a more self-determined channel lineup. As TDG first predicted in 2006, this new viewing paradigm is largely defined by an evolving set of paid, transactional, and free video streaming services –in one-third of cases supplemented by OTA – configured not by a pay-TV operator but by household decision-makers.”
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