22% of U.S. Broadband Homes Without Pay TV, Says TDG Report
In 2016, 22 percent of U.S. households with broadband did not subscribe to cable, satellite, or telco TV service. That shows a sharp rise from 2011, when 9 percent of the same group didn't subscribe to a pay TV service.
Those numbers come from "Life Without Legacy Pay TV," a report from TDG. Curiously, TDG sees the move to streaming services as a "dangerous trend":
"Wall Street and the media are myopically focused on the quarterly drip of legacy pay TV subscribers, which unfortunately overlooks a larger and more dangerous trend," says Michael Greeson, co-founder and director of research at TDG. "As TDG noted long ago, where broadband (and broadband video) goes, legacy pay TV subscriptions will increasingly decline. This is indeed what has transpired."
In the report, Greeson notes that multichannel video programming distributors (MVPDs) are creating skinny bundles to appeal to today's viewers, but those bundles provide a lower average revenue per user (ARPU). When customers break away from pay TV services, they also break from the internet-pay TV bundle, which the pay TV industry relies on.
A report last week from Kagan shows that cord-cutting accelerated in Q4 2016, and pay TV providers lost 1.8 million U.S. subscribers in 2016.
As households cut the cord and stream more of their video entertainment, data use is growing at a fast rate. 4.2% of homes are dubbed "power users."
The number of households getting their video services solely through broadband connections is rising, while OTT churn is holding steady at 18 percent.
U.S. households are moving to streamed services and on-demand entertainment, while seeing less value in live multichannel services of any kind.
If consumers were forced to choose between their SVOD and pay TV subscriptions, more Hulu fans would opt to leave pay TV behind.
When people with both pay TV and SVOD subscriptions were asked to make a choice, young viewers overwhelmingly preferred streaming.
All adult SVOD users can be broken into four mutually exclusive groups, research says, and surprisingly few of them are cord-cutters.
The rate of decline for cable has slowed in the U.S., while telcos bled the most in anticipation of AT&T U-verse's planned phase out.
Viewers are embracing the freedom to stream video at any time on any device, and they're watching a lot more of it.
11 percent of U.S. households have an SVOD account, but don't subscribe to pay TV, while streaming skinny bundles are still under 1 percent of the market.