Pay TV Industry to Lose 10.8M Subscribers by 2021, Kagan Forecasts
"Streamed bundles, online subscription services, self-aggregation and over-the-air delivery are playing more prominent roles," the research firm says.
The U.S. pay TV industry will lose 10.8 million subscribers through 2021, according to a latest forecast from research firm Kagan, part of S&P Global Market Intelligence.
"The increasing loss of traditional multichannel subscribers in the U.S. is further splintering a video landscape, in which streamed bundles, online subscription services, self-aggregation and over-the-air delivery are playing more prominent roles," Kagan said.
"Changing viewing habits point to mounting losses for traditional video services, and challengers are lining up to capitalize," explained Ian Olgeirson, research director, S&P Global Market Intelligence. "However, the operators are not without significant fortifications enabling expectations for preserving a majority share in the five-year outlook."
The first quarter earnings reports from pay TV companies caught analysts off guard with weaker-than-expected subscriber trends. "The real surprise of the quarter was the acceleration of cord-cutting in legacy [pay TV] subscribers, which was not offset by the estimated gain in virtual [providers]," MoffettNathanson analyst Michael Nathanson wrote in a recent report.
Kagan forecasts "accelerated declines of traditional multichannel subscriptions to 82.3 million" by 2021, about 20 percent off its peak levels. It also predicts "the emergence of virtual services from a niche pioneered by SlingTV and Playstation Vue to a mainstream option that accounts for nearly 11 million households."
The research firm also expects growth in households relying solely on "over-the-top delivery of self-aggregated online content" to nearly 18 million, or 14 percent of occupied households.