Broadcast Intelligence’s Pay-TV’s Future In An On-Demand World - US Market Edition report , analyses the recent performance of the top eight pay-TV providers in the US. It predicts that US traditional pay-TV subscriptions will drop, reaching 62 million by the end of 2023, down from 77 million in 2019.

Attributing drivers for the fall, the study noted that as subscription video-on-demand continues to grow, US pay-TV subscription declines will accelerate compared to the past decade, marking the continuation of an irreversible trend that is reshaping the US television industry.

The study confirms other trends regarding the pay-TV industry, that is revealing that over the past decade, pay-TV subscriptions in the US have slowly started to decline, as new content aggregation and distribution models, most notably subscription video-on-demand (SVOD), have grown popular among consumers.

Indeed, Broadcast Intelligence calculated that between 2011 and 2019, the number of SVOD subscriptions in the US has grown by 22 million to 193 million, while pay-TV subscriptions declined from 95 million to 77 million.

Ultimately, Broadcast Intelligence expects pay-TV ARPU growth to slow down significantly compared with the past decade, due to a combination of more intense competition from cheaper services and pay-TV customers shifting to cheaper bundles in order to manage their video expenditure.

Looking at the skinny vMVPDs bundles whose launch was seen to be a key step for pay-TV providers to mitigate losses, Broadcast Intelligence analysts found that this market amounted to 7 million subscriptions in 2019. Although the analyst expects vMVPDs to continue to grow by 2023, reaching 13 million subscriptions in that year, it adds this growth will not make up for the fall in traditional pay-TV subscriptions expected over the same period.

“Pay-TV is still playing a fundamental role in the TV ecosystem in the US. More than 70% of US households subscribe to pay-TV, and linear viewing still accounts for the vast majority of TV consumption for the average American,” said analyst Jack Genovese commenting on the Pay-TV’s Future In An On-Demand World - US Market Edition report. “TV also remains the largest source of revenue for most of the platform providers, despite broadband subscriptions having surpassed TV subscriptions around the middle of the decade. However, it is hard to see a way for platform providers to reverse the declining trend that has affected the market in the past decade.”

The analyst concluded by saying that the key for pay-TV providers surviving would be to increase the flexibility of the content offering and managing the content cost bill in a way that prioritises customers’ core needs.”