Cable TV and Satellite are Dying Thanks to Cord-Cutting. But Pay-TV Marches On.
The golden age of pay-TV is coming to an end and coronavirus is speeding it up. How is streaming changing the game?
Pay TV revenue in the U.S. peaked in 2015, but are seen dropping to $65 billion in 2015. That’s according to a new report, Pay TV Forecasts Update, from Digital TV Research.
The report also says that global pay TV revenues peaked four years ago, at $202 billion, which are seen falling to $152 billion by 2025, as cord-cutting trends continue to escalate.
“Despite poor results in some countries, there is still plenty of life left in pay TV. Digital TV Research forecasts 34 million additional pay TV subscribers between 2019 and 2025,” the firm said, of the worldwide number. “This takes the global total to 1.06 billion. The number of pay TV subscribers passed 1 billion in 2018.”
For instance, China is adding pay TV subscribers, with 328 million expected by the end of 2025, and China and India will combine to account for half of pay TV subscribers in the world by 2025.
Another report in the last week, from the accounting firm PriceWaterhouseCoopers, found that revenues from subscription TV in the United States will drop by a 2.9 percent compound annual growth rate through 2024, when they are seen at $81.4 billion.
The PriceWaterhouseCoopers report, however, did predict that “traditional pay-TV providers will focus on optimizing programming as a lever to increase video profitability, as well as continued investments in personalization, aggregation, speed and the best-possible digital experience.”
Pay TV providers in the U.S. lost 1.8 million subscribers in the first quarter of 2020, and another 1.57 million in the second quarter, as long term trends of cord-cutting began to escalate with the coronavirus pandemic and more and more people being stuck at home for months at a time. Companies in the cable and satellite space will begin announcing earnings later this month, so we’ll have a clearer picture of how the third quarter looked in terms of cord-cutting.
An Emarketer report earlier this month predicted that 6.6 million U.S. households will cut the cord in 2020, bringing the total of cord-cutting households in the country to 31.2 million. At the end of the year, per that projection, there will still be 77.6 million households with cable, satellite or other forms of pay TV, but that 7.5 percent will go down as the largest in history.
Emarketer also predicted that the number of American households with a pay TV subscription will go below 50 percent for the first time in 2024.
Pay TV companies did add over a million Internet customers in the second quarter of the year.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.