TDG: 58 Million U.S. Broadband Households Will Live MVPD-Free By 2025

The research consultancy forecasts five-year losses to increase four-fold between 2020-2025 versus 2015-2019

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According to The Diffusion Group — a division of Screen Engine/ASI — by 2025 more than half of U.S. broadband households will live without a MVPD service. During this time, pay-TV services will lose 36% of their 2020 subscriber base, up roughly four-fold from the prior 5-year period (-9.5%).

TDG’s 2020-2025 forecasts reflect two recent insights:

  1. The rate of decline in legacy MVPD subscriptions exceeded TDG’s worst-case scenario, and
  2. Consumer research reveals cord-cutting proclivities have reached a record high

In 2017, TDG forecast year-end 2020 legacy MVPD households would be between 83.5 million (low) and 87.0 million (mid), most likely at the lower end of this range. Legacy MPVD subscribers at year-end 2019 totaled 81 million, below TDG’s least-optimistic forecasts.

In late 2019, TDG modified its legacy MVPD expectations to better reflect the increased pace of cord-cutting. The new model predicted Q4.20 legacy subscribers would come in between 75.7 million (low) and 76.7 million (mid). As of Q2.20, there were just over 77-million legacy subscribers, so year-end numbers are likely to align with TDG’s 2019 forecasts.

Regarding virtual MVPD subscribers, TDG’s 2017 expectations for Q4.20 ranged from 11.4 million (mid) and 14.0 (high) million. As of Q2.20, there were 9.8 million vMVPD subscribers, so year-end numbers are likely to come in a bit below the 2017 mid-range forecasts, but in line with late-2019 updates predicting Q4.20 vMVPD subscribers to fall between 11.2 million (mid) and 10.9 million (low).

As to the second insight, Q1.20 research suggests cord-cutting proclivities may be moderating. When compared with prior and subsequent research, this proved to be an anomaly, and TDG warned clients of that likelihood. TDG’s Q3 research found this rate had in fact increased.

“For the last decade, TDG accurately anticipated the rate of legacy’s decline and the sluggish growth of vMVPDs,” said Michael Greeson, President and Principal Analyst at TDG. “However, our 2017 forecasts underestimated the growth in cord-cutting and overestimated the uptake of vMVPDs. Beginning in 2007, our 5-year forecasts have been eerily accurate, but it was obvious that 2017 forecasts needed to be tweaked. We were within 5%, but at two years out versus five.”

For perspective, consider the following.

  • In 2015, 16% of broadband households were to some degree likely to cancel their pay-TV service, 7% moderately likely or definitely doing so.
  • Today, 25% of broadband households are similarly inclined (up 56% from 2015), with 13% moderately likely or definitely doing so (up 86% from 2015).
  • Thus, 14-million U.S. broadband households are more than slightly likely to ditch pay-TV altogether, nearly half of which will do so in 2020.

Given these trends, TDG expects that 2025 will see less than half of U.S. broadband households subscribing to an MVPD service. “These video nomads have a very different concept of home video than their predecessors—one that costs less and includes a more self-determined channel lineup.’ As TDG first predicted in 2006, this new viewing paradigm is largely defined by an evolving set of paid, transactional, and free video streaming services—in one-third of cases supplemented by OTA—configured not by a pay-TV operator but by household decision-makers.

With MVPD-free viewers set to comprise a majority of broadband households in 2025, now is the time to field research to understand their behaviors, motivations, and preferences; and to best design and pitch new video services. Such insights are critically important to all companies in the value chain, whether content creators, aggregators, distributors, or CTV hardware &

TDG continues to advance the research agenda for companies active in the connected-consumer and quantum-media spaces. Want to know more about TDG’s new research on MVPD-free broadband households? Visit the Living Pay-TV Free Project page or simply contact Laura R Allen .

Press Contact:
Laura Allen Phillips
469.287.8060
lap@tdgresearch.com

About TDG (a Screen Engine/ASI Company)

TDG provides actionable intelligence on the quantum shifts impacting consumer technology and media behavior. For 16 years, we’ve helped technology vendors, media companies, and service providers master the digital transformation and meet modern viewers on their terms – whenever and wherever that may be. Learn more about how we can help improve your digital video strategies.

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