More homes are cutting the connection on traditional cable services as a result of the growth of streaming services. Experts estimate that the first annual fall in pay TV penetration globally will occur next year.
According to new statistics from Ampere Analysis, pay TV penetration—the ratio of pay TV subscribers to households—will decline across all regions by 2025. The research group projects a nearly four percentage point decline in the global pay TV penetration rate by 2028.
According to Ampere Analysis, global pay TV penetration in North America dropped from 84% in 2009 to 45% in 2023. The combination of high pricing and competition from subscription video on demand providers is the reason for the practically halved penetration. Pay TV can cost as much as $90 a month, according to Ampere Analysis senior analyst Rory Gooderick.
Ampere Analysis stated that despite the drop, North America will still have the largest yearly revenue per subscriber of any region—more than $1,100—from pay TV.
But the regions leading the declines are North America and Latin America, with Brazil at the forefront. In contrast, over the past few years, penetration has increased in Asia Pacific and Europe. According to Ampere Analysis, this is primarily because inexpensive IPTV services are included in inexpensive broadband packages.
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“Cable and satellite platforms will remain a powerful force in the TV world, and important distribution partners for streaming products, despite the projected decline in the reach of pay TV products,” according to Gooderick’s analysis.
Gooderick mentioned the agreement reached in September between Disney and Spectrum. Customers of Spectrum will have free access to Disney+’s ad-tier version thanks to the partnership. Select Plus will also receive free access to ESPN+. Customers of Spectrum TV Select will also have access to the ESPN streaming service; however, it is not yet known if this will also be free.
According to the report, bundling is essentially a chance for pay TV providers.
According to Gooderick, “This package structure offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilize subscriber trajectories.” It is already becoming more and more widespread in Europe and some areas of Asia.
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