Half of U.S. households will live without an MVPD by 2025, study finds

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Approximately 14 million U.S. broadband households are more than slightly likely to ditch pay TV altogether, of which nearly half are anticipated to do so by the end of 2020. (Getty/FS-Stock)

As the COVID-19 pandemic continues to fuel uncertainty for the cable industry, research conducted by The Diffusion Group reported that more than half of U.S. broadband households will live without an MVPD service by 2025.

During this time, the research firm expects pay TV services to lose 36% of their 2020 subscriber base, up roughly four-fold from the prior five-year period when they lost 9.5%. The rate of decline in legacy MVPD subscriptions exceeded 2017 forecasts for 2020, revealing cord-cutting behavior to be at an all-time high.

"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, in a statement. "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."

RELATED: Pay TV VOD usage grows during COVID-19 crisis: TDG

In 2015, 16% of broadband households were to some degree likely to cancel their pay TV service, 7% of which were likely or definitely doing so. Today, 25% of broadband households are similarly inclined, with 13% moderately likely or definitely doing so. This equates to approximately 14 million U.S. broadband households being more than slightly likely to ditch pay TV altogether, of which nearly half are anticipated to do so by the end of 2020.

For cable companies, who for several years now, have been steadily losing TV subscribers to cord-cutting pressures, the news is troubling.

Dish Network reported losing a record 413,000 subscribers and closed the first quarter with 11.32 million pay TV subscribers. Similarly, its rival DirecTV reported losing 1 million subscribers in the first quarter, reigniting talks of AT&T selling the satellite TV service.

And while cable executives have tried to adapt by focusing on their networks’ intellectual properties and brand identity and even initiating their own streaming venture, the threat of a recession and of increasing competition with companies like Netflix, Amazon and Apple will undoubtedly exacerbate the precipitous decline of MVPDs.

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