Pay-TV providers have been steadily shedding subscribers for several years now: Leichtman Research Group (LRG) data indicates that the top providers (representing about 93% of the market) accounted for 76.1 million subscribers at the end of last year, down from more than 95 million during 2014. The result of those losses, combined with increased likelihood to cut the cord, is that non-pay-TV households (including cord-nevers and cord-cutters) will outnumber pay-TV households for the first time next year, according to a forecast from eMarketer.
The research firm predicts a 7.2% drop this year in the number of households paying for traditional TV, to 66.4 million. That will remain slightly ahead of the number of non-pay-TV households – those who have canceled a subscription or never had one – which will rise by 10.3% to 64.3 million.
Yet the direction of the trends is clear – and they diverge greatly. The number of households paying for a traditional TV service is expected to continue declining throughout the forecast period, to 54.3 million in 2026. By virtue of that, the number of non-pay-TV households will increase over the same time frame, reaching 80.7 million, a difference of more than 25 million households.
However, there is an important caveat: these figures above exclude virtual MVPDs (vMPVDs), which deliver pay-TV-like services (live TV) over the internet. As eMarketer writes: “Although vMVPDs are streaming services, their channel lineups, business models, and subscription prices are pretty similar to cable packages.”
Including vMVPDs in the equation, and while the trend lines remain the same, the results are different. This year the number of households paying for traditional TV or a vMVPD service will decline to 80.9 million, but that will still be 31 million more than the number of households not paying for such services. And while the number of households paying for one of those services will continue to decline, to 72.4 million in 2026, that will again outnumber the number without these services, by almost 10 million.
So while it’s clear that traditional pay-TV services are in decline, factoring in vMVPDs certainly slows the rate of that decline. Indeed, eMarketer projects that the number of vMVPD households will increase from 15.2 million this year to 18.4 million in 2026.
Nonetheless, it’s important to remember that these trends are occurring within an environment in which:
- Live TV is the default viewing platform for only a minority of TV viewers;
- An increasing number of streamers – about half – say that streaming has replaced traditional TV rather than supplemented it; and
- Sports fans, typically a mainstay of traditional TV, are also cutting the cord.
