Gap Between OTT & Pay TV Widens in the U.S.

While 82 percent of U.S. broadband homes subscribe to at least one OTT service, just 58 percent use a traditional pay-TV service, according to Parks Associates.

The data was released via Parks Associates’ latest Consumer Insights Dashboard, which regularly surveys 10,000 U.S. broadband households on home internet, pay-TV and mobile usage.

The percentage of homes with an OTT service is up 6 points year-over-year, while pay-TV subs are down four points. Parks also found that 25 percent of surveyed homes use an OTT service delivering live channels, including 13 percent that have both traditional and online pay-TV services.

“The steady rise in online pay-TV adoption has made up for some of the significant drops in traditional pay TV,” said Steve Nason, research director at Parks Associates. “Video consumers are looking to online pay-TV services, either from a traditional provider or vMVPD, to offer a similar viewing experience and content offering to traditional pay TV but at a lower price point. However, online pay-TV providers, who don’t typically generate content on their own, have had trouble stabilizing subscriber costs as content fees continue to rise.”

Nason continued, “The Covid-19 pandemic accelerated many existing trends in the video services market. Moving forward, consumer preferences will continue to shift online as video viewers perceive these services to be less costly, more convenient and more aligned with how they want to consume video programming.”