The number of television subscribers in the United States and Canada will fall by 10 million from a peak of 112 million in 2012 to 102 million in 2022. As the number of households is predicted to increase by 11 million over the same period, pay television penetration will fall from 87.4% to 75.2%. The number of homes in the United States and Canada without pay television will climb from 20.69 million in 2012 to 41.56 million in 2022, more than doubling the number of homes that do not pay for a traditional television service. Will new online services address this market?
The number of television subscribers in these countries fell by 2 million in both 2015 and 2016, but the rate of decline will slow, shedding another 5 million by 2022, according to the North America Pay TV Forecasts report from Digital TV Research.
Simon Murray, the author of the report, says that cable has been losing subscribers since 2011, partly because not all analogue customers will convert to digital cable, or indeed any digital television platform.
“Some analogue cable subscribers will give up paying for TV services rather than convert to an often more expensive digital platform,” he suggested. “Cord-cutting is also a factor. It has been somewhat exacerbated by the traditional pay TV operators starting their own OTT platforms: satellite TV platform Dish provides Sling TV and DirecTV Now has recently started. Other distractions include Hulu, HBO Now and, of course, Netflix and Amazon Prime Video.”
The report forecasts that digital cable television subscriber numbers will remain flat at about 57 million. Satellite subscribers will also remain at around 36 million. Telco television will lose subscribers, largely attributable to AT&T encouraging its U-verse subscribers to move to its DIRECTV satellite platform. In Canada, Bell is doing the opposite and encouraging its satellite customers to convert to its telco television platform. Terrestrial television households are expected to increase by 10 million to over 30 million.
In 2022, the report forecasts that there will be 90.71 million television subscribers in the United States and 11.31 million in Canada. That represents a fall of just under 4% from the number 2016, which is significant but it still leaves over 100 million homes subscribing to television services.
In financial terms, the report says that subscription and pay-per-view revenue peaked at $108.58 billion in 2015. It forecasts that this will fall by $13.76 billion, or 12.7%, to $94.82 billion in 2022.
The informitv Multiscreen Index shows that the top ten television service providers in the United States had 88.69 million subscribers between them at the end of 2016. They collectively lost 937,000 television customers over the year, but as a result of mergers and acquisitions the top 10 services still have one and a half million more subscribers than a year previously, accounting for three quarters of television homes in the United States.
In Canada, the top five television service providers have 9.33 million subscribers between them.
Given other changes in technology, the traditional television service has been remarkably resistant to erosion or disruption.
While subscriptions to conventional cable, satellite and telco services in mature markets may fall, it seems likely that the numbers will be made up by a new range of online subscription services. The numbers paying for television and video services may well therefore increase.
North America Pay TV Forecasts is published by Digital TV Research. The Multiscreen Index is published by informitv.