As a result of accelerated chord-cutting, pay-TV services will lose 36% of their 2020 subscriber base. Less than half of total U.S. broadband households will have ties with multi-channel providing services.
The Diffusion Group released a forecast report indicating that more than half of U.S. broadband households will live without an MVPD service by 2025. As a result, pay-TV services will lose 36% of their 2020 subscriber base, a quadruple increase from five years prior at -9.5%. “For the last decade, TDG accurately anticipated the rate of legacy’s decline and the sluggish growth of vMVPDs,” said Michael Greeson, President, and Principal Analyst at TDG. “However, our 2017 forecasts underestimated the growth in cord-cutting and overestimated the uptake of vMVPDs.”
TDG’s's forecasts reflected that the rate of decline in legacy MVPD subscriptions exceeded TDG’s worst possible scenario about cord-cutting, reaching record highs. In 2017, TDG forecast year-end 2020 legacy MVPD households would range between 83.5 million, 87.0 million, the lower end being more likely. There were 81 million Legacy MPVD subscribers at the end of 2019. In late 2019, TDG modified its projections to better reflect the acceleration of chord-cutting. The new model predicted Q4.20 legacy subscribers would total between 75.7 million and 76.7 million. Q2.20 results inidicated just over 77-million legacy subscribers, so year-end numbers are likely to align with TDG’s 2019 forecasts.
TDG’s 2017 expectations for virtual MVPD subscribers in Q4.20 ranged from 11.4 million to 14.0 million. As of Q2.20, there were 9.8 million vMVPD subscribers. End of year figures are estimated to resemble 2017's data, Q4.20 vMVPD subscribers to fall between 11.2 million and 10.9 million. In 2015, 16% of broadband households were to some degree likely to cancel their pay-TV service, 7% moderately likely or doing so. Today, 25% of broadband households are similarly inclined (up 56% from 2015), with 13% moderately likely or doing so an 86% increase from 2015. Thus, 14-million U.S. broadband households are more than slightly likely to ditch pay-TV altogether, nearly half of which will do so in 2020.
TDG expects that 2025 will see less than half of U.S. broadband households subscribing to an MVPD service. Data reports thtat new viewing paradigm is largely defined by an evolving set of paid, transactional, and free video streaming services, resulting from US household decisions.
Our 2017 forecasts underestimated the growth in cord-cutting and overestimated the uptake of vMVPDs.” Michael Greeson President, Principal Analyst, TDG