One-Fourth of US Households Subscribe to Broadband But Not Pay-TV

A new analysis by The Diffusion Group (TDG) finds that the number of US households subscribing to a broadband service but not a pay-TV service will grow from 38 million in 2020 to 54 million in 2025, up 42 percent in the five-year period. “By 2025, nine-in-ten US households will use residential broadband, of which roughly half will use a pay-TV service from a legacy or virtual MVPD [Multichannel Video Programming Distributor],” said Paul Hockenbury, veteran industry researcher and TDG senior analyst. “The space between the two—so-called broadband-only or BBO customers—offers video creators and distributors lucrative growth opportunities.” In 2010, only 8 percent of US broadband households lived MVPD-free, with streaming video considered no more than a nice supplement to the 500-channel universe of pay-TV. By 2015, the rate doubled to 16 percent, then doubled again to 35 percent in 2020. This trend will continue through the decade, with a tipping point occurring no later than 2026, after which a majority of US broadband households will be MVPD-free. “A decade ago,” adds Hockenbury, “the BBO segment was comprised almost exclusively of bleeding-edge adopters; those defined by a fascination with new products and services and a pocketbook to fund their experiments. Today, the BBO segment is largely defined by early-mainstream dispositions: buying only when the price has come down, the technology has peer-demonstrated benefits, and plenty of support is available.”