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Less Than 50% of US Households Now Subscribe to Pay TV, as Cord-Cutting Jumps More Than Expected

Paramount+ to overtake Peacock this year as streaming wars heat up

March 7, 2023 (New York, NY) – Last year marked a major milestone for linear television: The proportion of US households that subscribe to traditional pay TV services dropped below half for the first time, as the jump in cord-cutting was bigger than expected. By the end of 2027, that proportion will approach just over one-third, according to the latest forecast for TV and streaming video from Insider Intelligence.

US Traditional Pay TV Households -
US Traditional Pay TV Households

Only 65.1 million households in the US still had traditional pay TV* by the end of last year, down 9.0% from 2021. That brought the percentage of US households subscribing to pay TV down to 49.7%, compared to 55.4% in 2021. This is a steeper decline than predicted in our September 2022 forecast, when we estimated this share would not drop below 50% until 2023.

“Streaming services have evolved to offer many advantages over cable and satellite packages,” said Paul Verna, principal analyst at Insider Intelligence. “They’re more affordable despite having raised prices, they provide more flexibility for stopping and starting service, and they increasingly carry programming that used to exist only on legacy systems, like live sports. Also, as they mature, streaming services are building libraries of must-see, digital-only content. This gives viewers more and more incentives to cut the cord and sign on with digital video providers.”

Our current forecast now predicts pay TV households will drop another 7.1% this year to 60.5 million, or 45.6% of US households. By the end of 2027, that figure will drop to 34.9%.

US Cord-Cutter Households -
US Cord-Cutter Households

This means the number of cord-cutting households** jumped more than expected last year. The number climbed 17.7% to 43.0 million. In September 2022, we forecast a 14.2% jump. We now expect that, by the end of this year, cord-cutting households will increase another 10.8% to 47.6 million, exceeding one-third (35.9%) of households for the first time. By the end of 2027, the figure will exceed 60 million, or 44.1% of US households.

“The availability of key content, specifically live sports, on streaming platforms will drive cord-cutting in the coming years,” said Oscar Bruce, forecasting analyst at Insider Intelligence. “Thursday Night Football moved from Fox to Amazon Prime Video in 2022. NFL Sunday Ticket will switch from DirecTV to YouTube when the new season starts this fall. As more marquee programming migrates online, we expect more households to cut the cord in favor of cheaper digital alternatives.”

US OTT Video Service Users -
US OTT Video Service Users

Among the digital video services, YouTube leads with 236.1 million viewers this year, which includes both paying and non-paying viewers. Among the subscription-only services, Netflix leads with 170.6 million viewers. We are expecting a slight drop in Netflix viewership this year as the company cracks down on password sharing, but we predict a return to positive growth in 2024. Amazon is second this year with 157.3 million, followed by Hulu with 127.8 million. Disney+ currently ranks fourth with 112.7 million viewers. A distant fifth is HBO Max with 89.7 million. Paramount+ will overtake Peacock—which is limiting free access—to bring up the rear with 72.6 million viewers. 

“Paramount+ is taking bold steps to broaden its appeal,” said Bruce. It will integrate Showtime into its ad-free plan later this year. The platform will also expand its franchises with the expected new spinoffs of ‘Billions,’ ‘Dexter,’ and ‘Yellowstone.’”

*Households with a subscription to a traditional pay TV service; excludes IPTV and pure-play online video services (e.g., Hulu, Netflix, Sling TV, YouTube). Traditional pay TV services include cable, satellite, telecom and fiber operators, multiple system operators (MSOs), multichannel video programming distributors (MVPDs), and major TV broadcast and cable networks.

**This is a cumulative figure.

Methodology

Insider Intelligence forecasts and estimates are based on our proprietary analysis, and include both quantitative and qualitative data curated from public companies, government agencies, research and media firms, and interviews with expert executives in relevant fields. We regularly re-evaluate available data to ensure our forecasts reflect the latest business and economic  developments and trends.

About Insider Intelligence

Insider Intelligence is a leading research provider focused on digital transformation. We empower professionals with actionable data, insights, and analysis to make informed decisions in a digital world. Formed as a merger of eMarketer and Business Insider Intelligence in 2020, we produce nearly 200 forecasts, 300 reports, 7,000 charts, and 1,500 newsletters across the Advertising, Media, and Marketing; Financial Services; Healthcare; and Retail and Ecommerce industries. Insider Intelligence is a division of Axel Springer S.E.

Contact Info

Douglas Clark

PR Director

+1-646-863-8807

dclark@emarketer.com

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