According to Digital TV Research, the number of pay TV subscribers in North America (Canada and the United States) will fall by 10 million from 112 million in the peak year of 2012 to 102 million in 2022. Although this marks a 9% decline, this does not indicate a massive cord-cutting problem, the research house says.
However, the number of non-pay homes is expected to climb from 20.69 million to 41.56 million over the same period. The number of total households is expected to increase by 11 million, including non-TV households. To put it another way, pay TV penetration is expected to drop from the peak of 87.4% in 2013 to 75.2% by 2022.
The number of pay TV subscribers declined by 2 million in both 2015 and in 2016. However, the rate of decline is expected to slow from now on, although the 2022 total is expected to be 5 million lower than the end-2016 total, according to the North America Pay TV Forecasts report.
Simon Murray, principal analyst at Digital TV Research, said: "Where are the lost subscribers in the decade to 2022 going? Some analog cable subscribers will give up paying for TV services rather than convert to an often more expensive digital platform."
"Cord-cutting is also a factor," he said. "It has been somewhat exacerbated by the traditional pay TV operators starting their own OTT platforms: Satellite TV platform DISH provides Sling TV, and DirecTV Now has recently started. Other distractions include Hulu, HBO Now and, of course, Netflix and Amazon Prime Video."
Cable has been losing subscribers since 2011. This is partly due to the fact that not all of the 18 million analog cable subscribers at end-2010 will convert to digital cable TV platforms - or any digital pay TV platform for that matter.
The free-to-air digital terrestrial TV (DTT) household total is expected to climb by 10 million between 2016 and 2022 to 31 million.
The digital cable TV total is expected to remain flat at about 57 million subs from 2015. Satellite TV is also expected to stay flat at about 36 million from 2015. However, telco IPTV is expected to lose subscribers. Much of the expected IPTV loss is attributable to AT&T encouraging its U-Verse subscribers to its DirecTV satellite platform. In Canada, Bell is doing the opposite: encouraging its satellite TV subs to convert to its IPTV platform.
Pay TV revenues (subscriptions and pay-per-view) in North America peaked in 2015 at $108.58 billion, Digital TV Research says. Revenues are expected to fall by 12.7% - or by $13.76 billion - to $94.82 billion in 2022. Cable revenues are expected to decline by $12.13 billion - $2.19 billion less from analog cable and $9.94 billion lower for digital cable. Satellite TV is expected to grow by $1.93 billion, but IPTV is expected to fall by $3.55 billion, a drop of 32.5%.
