According to Parks Associates, the percentage of U.S. broadband households that use only antennas to receive TV has steadily increased since 2013 to reach 15%. The research house says the increase coincides with a drop in pay TV subscriptions and an increase in Internet-only video subscriptions.
"Pay TV subscriptions have dropped each year since 2014, falling to 81% of U.S. broadband households in Q3 2016," said Brett Sappington, Parks' senior director of research. "Several factors have played a part in this decline, including growth in the OTT video market, increasing costs for pay TV services, and consumer awareness of available online alternatives."
Parks notes declining pay TV satisfaction in each of the last three years. Only one-third of pay TV subscribers report being "very satisfied" with their pay TV service. The research house says 63% of U.S. broadband households subscribe to at least one OTT service, and 31% of U.S. broadband households have multiple OTT service subscriptions.
"Pay TV providers are adapting to address a fundamentally different video services market than existed three years ago. Challenges still remain for consumers in aggregating and discovering their favorite content and being able to watch on their preferred screen. Live broadcasts of high-profile events remain a challenge for online delivery, though pay TV and broadcast TV conquered live distribution long ago," Sappington said. "These challenges represent areas in which pay TV providers, or new entrants, can still win consumer attention, viewership and revenue."
Other findings indicate:
- In 2016, twice as many subscribers downgraded (12%) their pay TV service than upgraded (6%) it.
- The likelihood of non-subscribers adopting pay TV has declined since 2012.
- Only one-half as many Cord Nevers adopted pay TV in 2016 (2%) as in 2015 (4%).
- The size of the Cord Never segment is slowly increasing.
"With the continued decline of traditional pay TV subscriptions, 2017 will be characterized by the rise of online pay TV services," Sappington said. "While traditional pay TV provides superior viewing quality, OTT video commonly excels in discovery, portability and personalized user experiences. Consumers care less about the network used to deliver the content than they do about access to the content, ease of use, and convenience."