Pay-TV in the United States is in free fall as more and more families cut the cable cord. According to eMarketer, by the end of 2023, less than half of US households will have a traditional pay-TV subscription. The total number of pay-TV households will drop to 65.1 million, a 4.8% decrease from 2022.
Between 2016 and 2021, pay-TV lost more than 50 million adult viewers (or 25.5 million households), posting the steepest drop in 2020, at 7.7%. As pay-TV declines, virtual multichannel video programming distributors (vMVPDs) will be on the rise. Many cord-cutting households will turn to such services as Hulu + Live TV and YouTube TV. By the end of 2022, 15.0 million households will subscribe to a vMVPD, up 7.6% from 2021 and representing 11.4% of all US households.
The growth of vMVPDs will not be enough to offset the decline of pay-TV. In 2022, 63.2% of all households will have either pay-TV or a vMVPD, but this figure will decline to 54.8% in 2026. The streaming landscape is changing as streamers strike deals for live sports programming and introduce ad-supported tiers of membership. These factors create an increasingly enticing environment for disgruntled pay-TV households to finally cut the cord.
Moreover, eMarketer also found that TV squeaks past online and mobile video to become the top video ad channel among US agencies and marketing professionals. In October, 47% ranked TV—including connected TV (CTV)—as the No. 1 video type for achieving their advertising goals, and that’s 1% point more than those who put an online or mobile video in the first place.
Half of the respondents named video the most valuable ad channel overall, so it’s no surprise that US video ad spending is rising. In 2021, spending grew by 45.4% to exceed $60 billion for video ads on computers, mobile phones, CTVs, and other connected devices. While TV faced off against other digital video in the survey, marketers are riding the greater video wave and watching where the streams take them.