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Pay TV Households To Dwindle to 73 Million by 2024: Analysts

MoffettNathanson Cord Cutting
(Image credit: MoffettNathanson)

The number of pay TV homes will drop to 73.2 million households by 2024 from 83 million at the end of this year, according to analysts Craig Moffett and Michael Nathanson of MoffettNathanson Research.

In a report issued Tuesday, the analysts said the cord-cutting will continue at a 4% to 5% annual pace, even though sports viewing appears to be rebounding. 

There were 93 million pay TV households in the third quarter of 2019, with 83.5 million with traditional video distributors and 9.5 million on virtual multichannel video programming distributors (MVPDs). They accounted for 78% of homes, versus 26.4 million non-pay TV homes, or 22%. 

Also: Cord-Cutting Getting Worse in 2021-22: S&P Report

MoffettNathanson said that by the third quarter of 2021, there were just 84 million pay TV homes, 71 million with traditional distributors and 13 million via vMVPDs. Non-pay TV homes grew to 39 million, or 32%. By year-end, pay TV households will be down to 83 million, the analysts said.

By 2024, MoffettNathanson said, the number of traditional pay TV homes will be equal to the number of non-pay TV homes. 

In their report, the analysts attempted to figure out what the absolute floor was for pay TV subscribers. Sports fans are among those most likely to keep pay TV. Viewers in about 58 million households describe themselves as sports fans who watch at least one event per month.

The least likely cord-cutters are households with members who are both sports fans and live news viewers. Looking at that group puts the floor at about 53 million, the report said.

“We believe the 18 million pay TV subscribers who are regular news viewers (but do not watch sports) and the 7 million who don’t watch sports or news are at risk for further cord-cutting,” the report said.

MoffettNathanson partnered with consulting firm Altman Solon on a study of consumer interest in sports. 

The number of households that consider themselves regular sports viewers has increased from 2019, while the number of traditional pay TV subscribers has continued to decline. 

“Sports fans are not abandoning traditional pay TV at all,” the report said. ”In fact, we estimate the number of regular sports viewers within the linear ecosystem (traditional pay TV or vMVPDs) has increased by over 2 million to 58.4 million in 3Q 2021 from 55.8 million 3Q 2019. 

“We estimate that the drop in linear TV subscribers has come exclusively from people who do not view sports, and the increase in sports viewership has come primarily from people who either have cut the cord or never had a pay TV subscription in the first place,” MoffettNathanson added.

While sports is a bulwark for pay TV, some sports are moving to streaming, the report notes.

“We expect sports leagues and media owners will become more aggressive in moving sports content over-the-top as it appears to be driving incremental reach without cannibalizing sports,” the report said. "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 their streaming partnerships.”

This could change the floor for pay TV. “If more sports content moves OTT, then perhaps some casual sports viewers are also at risk for further cord-cutting,” MoffettNathanson said. ■