U.S. legacy pay TV services to lose 26% of subscribers by 2030

Virtual MVPDs to Disrupt Pay-TV Marketplace, Legacy Services to Lose 26% of Subscribers by 2030

PLANO, Texas — The future of residential pay-TV services will be wrought from an intensifying clash between virtual operators like Sling TV and DirecTV Now, and traditional cable, satellite, and telco pay-TV providers. Unfortunately the battle will be for a larger slice of a declining market. This according to a new report by research and advisory firm, The Diffusion Group.

The Rise of the Virtual Pay-TV Provider – Analysis & Forecasts features TDG’s latest analysis of the rapidly evolving residential pay-TV space, and includes long-term forecasts for both virtual and legacy subscribers in the US.

Generally, TDG expects that the penetration of live multi-channel pay-TV services will decline from 85% of US households in 2017 to 79% in 2030. While statistically a loss of only 7%, it nonetheless illustrates the ongoing secular decline of a once healthy market space. TDG predicts that, by 2030, roughly 30 million US households will live without an MVPD service of any kind, be it virtual or legacy.

During this time, legacy MVPDs will experience considerable subscriber losses, due not only to long-term industry trends but also growing competition from virtual pay-TV providers. Consequently, legacy pay-TV penetration will fall from 81% of US households in 2017 to 60% in 2030, down 26%. At the same time, virtual pay-TV penetration will grow from roughly 4% of US households to 14%, up 350% but from a very small base.

“TDG said early on that the future of TV was an app. Unfortunately, most incumbent MVPDs weren’t taking notes,” notes Joel Espelien, TDG Senior Analyst. “The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system.”