Forecast: Fewer Than Half of US Households to Have Traditional Pay-TV Next Year

April 5, 2022

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Pay-TV & Cord-Cutting | Television

Pay-TV penetration has dropped precipitously in recent years, driven by a rush to the exit among younger consumers, who have instead been attracted to the video content provided by streaming services. Now, a forecast from eMarketer calls for a new milestone to be hit next year, as the firm predicts that fewer than half of US households will have a traditional pay-TV subscription.

This year, eMarketer estimates that 52.4% of US households will subscribe to a traditional pay-TV service, a figure that will decrease to 49.5% next year. Those declines are predicted to continue as the firm talks of a “free fall,” with the percentage of US households subscribing to a legacy service expected to tumble all the way to 42.4% in 2026.

That would mean that 57.2 million households would subscribe in 2026, down from an estimated 68.5 million this year. Still, that decline would be an improvement on the huge drop experienced between 2016 and 2021, when eMarketer says pay-TV shed 25.5 million households.

Virtual multichannel video programming distributors (vMVPDs) – such as Hulu + Live TV and YouTube TV – will pick up the slack to some extent, per the forecast. eMarketer projects that by the end of this year, 15 million households will subscribe to a vMVPD service, representing a 7.6% climb from last year and accounting for 11.4% of all US households.

Factoring these households into the equation, and eMarketer predicts that 63.2% of US households will have either a pay-TV or vMVPD subscription this year, dropping to 54.8% in 2026.

Top Pay-TV Services Lose Millions of Subscribers Again in 2021

Separately, Leichtman Research Group (LRG) reveals that the biggest pay-TV providers in the US, which combine to represent 93% of the pay-TV market, shed roughly 4.69 million net subscribers last year. This was actually a minor improvement from 2020, when they had a net contraction of 4.87 million. These figures include vMVPD providers; when excluding them, the results show that traditional pay-TV services lost 5.585 million subscribers last year, versus 5.785 million the year earlier. LRG’s data indicates that the top pay-TV providers accounted for almost 68.2 million subscribers last year, a figure broadly in line with eMarketer’s estimates.

LRG’s figures differ somewhat from eMarketer’s estimates, though, in that LRG indicates that the top vMVPD services had 7.9 million subscribers last year, a smaller figure than estimated by eMarketer of 15 million subscribers by end of 2022.

To put the traditional pay-TV declines in context, though, the ~68.2 million cited by LRG for the end of 2021 (excluding vMVPD services) is down from more than 90 million as recently as 2017.

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