A blunt research note from leading market analyst MoffettNathanson is warning that the undying devotion of American sports fans is keeping the linear TV ecosystem from “rapidly imploding”.
The study noted that despite the enduring fandom keeping bundles alive, over the past two years there has been a “notable” decline in pay-TV subscribers, even when including growth in virtual MVPD services.
It noted that in the third quarter of 2019 there were 93 million pay-TV subscribed in the US, representing 78% of households that had television. Ye the last two years of rapid cord-cutting has seen the number of pay-TV subscribers including MVPDs fall to 84 million in Q3 2021, 69% of US TV households. The analyst projects -4% to -5% annual declines in pay-TV subscribers including virtual MVPDs, reaching 73 million by 2024 from around the 83 million expected in 2021. The analyst forecasts that by 2024, there will be the same number of homes subscribing to traditional pay-TV as those that are non-pay-TV subscribers.
The huge erosion in subs was attributed to non-sports fans seemingly leaving bundles, leading to the analyst attempting to calculate what the logical floor was for US pay-TV arena. Worryingly, MoffettNathanson said there were another 26 million non-on sports households that were in danger of leaving the pay-TV universe. By contrast it said there were 53 million US households who described themselves as regular sports and new viewers who support bundles.
Going forward, the analyst odes note that even though the fact that there were over 30 million US homes at risk of further pay-TV erosion, there was a case to be made that the streaming services that offer sports could actually build the pay-TV market. However, it warned that key rights holders must avoid leaking all of their key rights over-the-top in order to avoid “killing what is left of the golden goose.”
It noted that in the third quarter of 2019 there were 93 million pay-TV subscribed in the US, representing 78% of households that had television. Ye the last two years of rapid cord-cutting has seen the number of pay-TV subscribers including MVPDs fall to 84 million in Q3 2021, 69% of US TV households. The analyst projects -4% to -5% annual declines in pay-TV subscribers including virtual MVPDs, reaching 73 million by 2024 from around the 83 million expected in 2021. The analyst forecasts that by 2024, there will be the same number of homes subscribing to traditional pay-TV as those that are non-pay-TV subscribers.
The huge erosion in subs was attributed to non-sports fans seemingly leaving bundles, leading to the analyst attempting to calculate what the logical floor was for US pay-TV arena. Worryingly, MoffettNathanson said there were another 26 million non-on sports households that were in danger of leaving the pay-TV universe. By contrast it said there were 53 million US households who described themselves as regular sports and new viewers who support bundles.
Going forward, the analyst odes note that even though the fact that there were over 30 million US homes at risk of further pay-TV erosion, there was a case to be made that the streaming services that offer sports could actually build the pay-TV market. However, it warned that key rights holders must avoid leaking all of their key rights over-the-top in order to avoid “killing what is left of the golden goose.”
