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22% of U.S. Broadband Homes Without Pay TV, Says TDG Report

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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.

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