Pay-TV Subs & Penetration Declining in the U.S.

DURHAM: New findings from Leichtman Research Group (LRG) shows that U.S. multi-channel video penetration essentially peaked two years ago, at 88 percent, and has been steadily declining since then.

Currently, LRG says that 86 percent of households nationwide subscribe to some form of multi-channel video service. Among the households that don’t have pay TV, 40 percent subscribe to Netflix, 11 percent to Amazon Prime and 7 percent to Hulu Plus. In total, 42 percent of non-subscribers get at least one of these three OTT services.

This means that 8 percent of all TV households are watching over-the-air (OTA) broadcast TV only, down from 10 percent in 2010; 6 percent are watching a combination of OTA and OTT programming. This group includes about 1 percent of all households that don’t subscribe to a multi-channel video service primarily because they can watch programming over the Internet or via Netflix.

Average spending on a multi-channel video service is $83.25, an increase of 5.9 percent from last year.

"The number of households subscribing to a multi-channel video service is slightly higher than it was three years ago, yet the penetration of households subscribing to a service is now below its peak," said Bruce Leichtman, the president and principal analyst for Leichtman Research Group. "While some consumers continue to go in and out of the category, economic factors appear to be as a strong force in shaping this market as the emergence of over-the-top alternatives alone."