Cord-cutting to nearly double in US broadband-only homes over the next five years | Media Analysis | Business | News | Rapid TV News
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In a finding that may chill the traditional US pay-TV market, broadband-only households in the country are set to grow from 23.3 million in 2018 to 40.8 million by 2023, thus driving cord-cutting, according to estimates from Kagan.
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The media research firm expects the segment of broadband homes without a traditional multichannel subscription to account for nearly one-third of US households in the next five years. The company’s findings show that over-the-top (OTT) products, whether subscription video-on-demand, direct-to-consumer or virtual multichannel, are offered at competitive prices which is a major factor fuelling cord-cutting in a context of affordability. Other reasons for the strong projection of broadband-only growth include the ease of joining and cancelling online streaming services which typically do not require contracts.

Kagan also expects broadband-only homes, or households without a traditional multichannel video package but a subscription to wireline broadband, to rise at an 11.9% compound annual growth rate from 2018 to 2023. Broadband-only homes are set to account for 41.7% of wireline broadband households by 2023. Kagan expects cable and telco broadband to serve nearly 75% of US households by that time.

“The steep upward trend of due to ‘cord-cutting’ is not surprising given the abundance of online video services on the market, although this could be a circular argument, with more companies jumping on the streaming video bandwagon in response to the growing broadband-only market,” said Tony Lenoir, senior Kagan research analyst at S&P Global Market Intelligence.

“The value proposition of streaming video services touches a chord with the average consumer. The vast majority of streaming services offer free trial periods, effectively allowing consumers to shop around while bypassing hardware hassles associated with legacy video distribution. This coupled with the fact that streaming services are typically screen-agnostic and seamlessly portable, offer individual, customised consumption for custmers.”