North American Households Without Pay-TV to Double

27 Mar, 2017 By: Erik Gruenwedel

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It is no secret increasing numbers of households are eschewing the traditional pay-TV ecosystem in favor of alternative home entertainment options.

New from Digital TV Research estimates the number of homes without pay-TV will double to more than 41 million in 2022, from 21 million in 2012.
Pay-TV households declined by 2 million homes in 2015 and 2016, respectively. To put it another way, pay-TV penetration will drop from the peak of 87.4% in 2013 to 75.2% by 2022.

Pay-TV revenue [subs and pay-per-view] in North America peaked in 2015 at $108.6 billion. Revenue will fall by 12.7% — or by $13.8 billion — to $94.8 billion in 2022. Cable revenue will decline by $12.13 billion — $2.19 billion less from analog cable and $9.94 billion lower for digital cable. Satellite TV will grow by $1.9 billion, but IPTV will fall by $3.5 billion — or 32.5%.

Interestingly, the increasing number of non-pay-TV homes is not singularly due to “cord-cutting,” or pay-TV homes dropping service. Rather, millions of analog cable subscribers dropped service instead of converting to digital.

“Cord-cutting … has been somewhat exacerbated by the traditional pay-TV operators starting their own OTT platforms, [including] Dish Network launching Sling TV and [AT&T bowing] DirecTV Now. Other distractions include Hulu, HBO Now and, of course, Netflix and Amazon Prime Video,” Simon Murray, principal analyst at Digital TV Research, said in a statement.

Murray said free-to-air DTT households would climb by 10 million homes between 2016 and 2022 to 31 million homes — despite having limited channel choices.

Digital TV Research said digital cable TV and satellite TV would remain flat at about 57 million and 36 millions subs, respectively. However, telecoms will lose subscribers. Much of the loss is attributable to AT&T encouraging its U-Verse subs to switch to DirecTV. In Canada, Bell is doing the opposite: Encouraging satellite TV subs to convert to its IPTV platform.

 

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