The number of traditional pay TV households in the U.S. will continue to decline and could equal the amount of non-pay TV homes in the next few years.
That’s according to new estimates from media analyst firm MoffettNathanson, which is forecasting that the number of households sticking with traditional pay TV will shrink to below 60 million by 2024. At that point, the firm estimates there will be approximately 73 million U.S. pay TV subscribers (including virtual MVPDs), down from 93 million in the third quarter of 2019 and 84 million in the third quarter of 2021.
MoffettNathanson said that all 9 million subscribers who left pay TV in the past two years don’t identify as sports viewers that there are another 26 million non-sports households that could still leave pay TV.
“Yet, there are 53 million households who describe themselves as regular sports and news viewers that we are assuming, all things equal, to be the bedrock floor of the pay TV world,” wrote Michael Nathanson in a research note. “This group of more affluent, more male and somewhat younger consumers are also consistently more likely to be regular viewers of all other genres of pay TV content, which indicates that the most essential parts of today’s linear bundle are live channels.”
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In all, MoffettNathanson estimates that there are still more than 30 million U.S. homes at risk of leaving pay TV.
As the pay TV universe shrinks, media companies and leagues have become more aggressive about putting live sports on direct-to-consumer streaming platforms to increase incremental reach without cannibalizing pay TV sports viewers, according to the firm. The firm highlighted the more than 180 MLB and NHL games on ESPN+ and NFL games appearing on Peacock, Paramount+ and Amazon Prime Video.
“However, we believe moving sports content to DTC services is a delicate balance, especially if major sports leagues like the NFL decide to become more open with the streaming relationships. Today, there appears to be a solid base of 58 million sports viewers who subscribe to pay TV (including vMVPDs), which represents a long-term floor in pay TV subs,” wrote Nathanson. “Yet, if more sports content moves OTT, then perhaps some casual sports viewers are also at risk for further cord-cutting.”