With report after report of late illustrating the seemingly ceaseless wave of cord-cutting that’s upending the pay TV industry, it was only a matter of time before a research report emerged that put a date on when U.S. consumers will cough up more cash for streaming video than for MVPD-delivered channels.
That, according to Strategy Analytics, is coming in three years.
Strategy Analytics’ U.S. Subscription TV Forecast report says the transition will arrive in 2024.
It also finds that consumer spending on traditional pay TV services fell by 8% in 2020 to $90.7 billion and will slide to $74.5 billion in 2023.
By contrast, spending on streaming services (such as video-on-demand and internet-delivered subscription TV) rose by 34% to $39.5 billion in 2020.
While that’s a big gap today, Strategy Analytics says streaming services subscriber spend will reach $76.3 billion in 2024, passing pay TV for the first time.
It gets more ominous for MVPDs in the following 24 months.
By 2026, Strategy Analytics predicts that pay TV will account for only 40% of spending on video and TV services, compared to 81% in 2016.
“The revenue picture gives the best illustration of the relative strength of new and old businesses,” Michael Goodman, Director of TV & Media Strategies, commented. “The fact that viewers are willing to divert an ever-increasing share of their entertainment wallet away from pay TV and towards new internet-based services demonstrates that the future lies with streaming video services rather than legacy pay TV players. This is a long-term transition, but there is no doubt that the writing is on the wall for pay TV as we have known it for more than 40 years.”