The number of pay-TV subscriptions in the U.S. and Canada will dip from a peak of 112 million in 2012 to 102 million in 2022.
While this marks a 9% decline, Dublin, Ireland-based Research and Markets believes its findings do not point to “a massive cord-cutting problem.”
Should multichannel video programming distributors (MVPDs) be pleased with this finding?
No, based on the decline in pay TV penetration forecast through 2022, and dip in pay TV subscribers seen between 2015 and 2016.
In its review of MVPD activity in the U.S. and in Canada, the Irish research firm found that the number of non-pay homes will climb from 20.69 million to 41.56 million over the same period. This reflects an increase in the number of total households by 11 million, and includes non-TV households.
“To put it another way, pay TV penetration will drop from the peak of 87.4% in 2013 to 75.2% by 2022,” Research and Markets concludes.
Meanwhile, 2016 wasn’t such a hot year for MVPDs: The number of pay TV subscribers declined by 2 million in both 2015 and in 2016.
Research and Markets believes this rate of decline will slow from now on. Nevertheless, the 2022 total will be 5 million lower than the end-2016 total.
Research and Markets details its just-released findings in the report “North America Pay TV Forecasts.”
Principal Analyst Simon Murray discussed some of the top-line findings, noting, “Where are the lost subscribers in the decade to 2022 going? Some analog cable subscribers will give up paying for TV services rather than convert to an often more expensive digital platform.”
He continued, “Cord-cutting is also a factor.”
Notably, Murray pins some of the cord-cutting woes on DBS providers. “[Cord-cutting] has been somewhat exacerbated by the traditional pay-TV operators starting their own OTT platforms,” he said, referring to DISH Network’s Sling TV and the recently launched DirecTV Now offering. “Other distractions include Hulu, HBO Now and, of course, Netflix and Amazon Prime Video.”
Cable has been losing subscribers since 2011. Murray says this is partly because not all of the 18 million analog cable subscribers at the end of 2010 will convert to digital cable TV platforms – or any digital pay TV platform, for that matter.
The free-to-air digital television household total will climb by 10 million between 2016 and 2022, to 31 million from 21 million.
But, Murray makes an interesting conclusion.
“Presumably, many of these sets will gather dust as these homes will have limited channel choice,” he predicts, despite the rise in DT offerings from broadcast TV companies and the coming benefits of ATSC 3.0 in North America.
Research and Markets broke out its MVPD data, and found the following:
- The digital cable TV total will remain flat at about 57 million subs from 2015.
- Satellite TV will also stay flat at about 36 million from 2015.
- IPTV will lose subscribers. Much of the IPTV loss is attributable to AT&T encouraging its U-Verse subscribers to its DirecTV satellite platform. In Canada, Bell is doing the opposite by encouraging its satellite TV subs to convert to its IPTV platform.
Research and Markets’ assessment of DirecTV may be short-sighted, however. As DirecTV and U-Verse merge, with the U-Verse brand disappearing for TV viewers, a long-term shift away from dishes and toward IPTV delivery is likely. DirecTV Now is a small step in this direction.
BEHIND THE MVPD MONEY
In review of subscriptions and Pay-Per-View revenue in North America, Research and Markets finds dollars peaking at $108.58 billion (USD).
Revenues will fall by 12.7% – or by $13.76 billion – to $94.82 billion in 2022.
Cable revenues will decline by $12.13 billion – $2.19 billion less from analog cable and $9.94 billion lower for digital cable.
Satellite TV will grow by $1.93 billion, but IPTV will fall by $3.55 billion – or by a massive 32.5%.
Companies mentioned in the “North America Pay TV Forecasts” report include Altice, Charter Communications, Cox Communications, Frontier Communications, Wide Open West, and such Canadian giants as Rogers, Shaw Communications and Telus.