Cord-Cutter and -Never Households Rising 4 Points in 2019 to 34%
At the end of 2018, 30% of U.S. households didn't have a pay TV account (cable, satellite, or telco). That's an increase from 26% at the end of 2017. And that number hasn't plateaued yet, as it will increase to 34% by the end of this year.
That forecast comes from Convergence Research, which released a report today on U.S. and Canada pay TV and streaming adoption. In 2018, nearly 5 million U.S. households became cord-cutters or cord-nevers.
Pay TV is on the decline in the U.S., shedding 4.01 million subscribers in the in 2018. Convergence expects the area to lose 4.56 million more this year.
Pay TV is still the more lucrative area, however. Even though more U.S. households now have an OTT subscription than a pay TV subscription, pay TV's average revenue per user (ARPU) will still be three times that of OTT household ARPU in 2021.
vMVPDs have had a hard time finding an audience, and Convergence sees them as no match for pay TV:
"With ARPU half the traditional TV average, lackluster margins, programming gaps and technical issues, live multichannel OTT provides little counter to category killers Netflix and Amazon that sell at lower price points and essentially without advertising. We believe a number of OTT plays, including large and niche, will fail due to insufficient subscriber traction, cost, and competition," the report says.
After looking at 66 OTT companies, Convergence said U.S. OTT subscription payments grew 37% to $16.3 billion in 2018. It forecasts that number to grow to $22 billion by the end of this year.
The full report, "The Battle for the North American (U.S./Canada) Couch Potato: OTT and TV," is available for purchase.
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