Research: 25% US homes have broadband but no pay-TV

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Findings from research firm TDG indicate that the number of US households subscribing to a broadband service but not a pay-TV service will grow from 38 million in 2020 to 54 million in 2025, up 42 per cent in the five-year period.

“By 2025, nine-in-ten US households will use residential broadband, of which roughly half will use a pay-TV service from a legacy or virtual MVPD,” said Paul Hockenbury, industry researcher and TDG senior analyst. “The space between the two—so-called broadband-only or BBO customers—offers video creators and distributors lucrative growth opportunities.”

Early last decade, TDG predicted that streaming would incrementally chip away at pay-TV’s dominance, at first impacting viewing time, then subscriptions. This has in fact transpired.

In 2010, only 8 per cent of US broadband households lived MVPD-free, with streaming video considered no more than a nice supplement to the 500-channel universe of pay-TV. By 2015, the rate doubled to 16 per cent, then doubled again to 35 per cent in 2020. This trend will continue through the decade, with a tipping point occurring no later than 2026, after which a majority of US broadband households will be MVPD-free.

“A decade ago,” adds Hockenbury, “the BBO segment was comprised almost exclusively of bleeding-edge adopters; those defined by a fascination with new products and services and a pocketbook to fund their experiments. Today, the BBO segment is largely defined by early-mainstream dispositions: buying only when the price has come down, the technology has peer-demonstrated benefits, and plenty of support is available.”

Further insights:

  • Just because they live without an MVPD service does not mean they are not regular TV viewers.
    • BBOs spend 28 hours each week watching TV, roughly 10 per cent less than broadband households that subscribe to a legacy or virtual pay-TV service (BBPTVs).
  • Without a pay-TV service in the home, consumers regularly must turn to non-MVPD content sources, including streaming and OTA.
    • Roughly 60 per cent of BBO TV time is spent watching streaming video, 50 per cent greater than their counterparts, with SVoD by far the TV content source used most often.
    • Netflix, Amazon Prime Video, and Hulu are the three most popular SVoD apps among BBOs, as they are among their counterparts. However, in each case BBOs are more likely than BBPTVs to use the app, especially Hulu (51 per cent vs. 41 per cent).
    • Two-thirds of BBOs watch free ad-supported streaming video on TV, with YouTube by far the dominant service, used by 76 per cent, twice its next-closest competitor, Pluto, used by 36 per cent.
    • More than one-third of BBOs use a terrestrial TV antenna, among which OTA content is viewed 12 hours each week.

“Innovative MSOs recognised years ago that it was just a matter of time before BBOs comprised a majority of their customers,” says Michael Greeson, TDG President and co-author of the report, The Rise of MVPD-Free Households. “While a strategic inevitability, only recently, however, has this segment rose to the level of tactical priority.”


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