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‘Legacy’ Pay TV Market to Fall to 60% by 2030: Forecast

About 30 million U.S. homes to go without an MVPD of any kind by then, TDG predicts 11/29/2017 8:06 AM Eastern

Fueled in part by the rise and penetration of virtual MVPDs, legacy pay TV service penetration will fall to 60% by 2030, The Diffusion Group predicts in a forecast released Wednesday.

TDG likewise predicts in its new study  – The Rise of the Virtual Pay-TV Provider -- that the penetration of live multichannel pay TV services (traditional MVPDs and virtual MVPDs) will decline from 85% of U.S. homes this year, to 79% in 2030.

“While statistically a loss of only 7%, it nonetheless illustrates the ongoing secular decline of a once healthy market space,” TDG noted, adding that it expects that about 30 million U.S. homes will go without an MVPD of any sort (traditional or virtual) by 2030.

During that time, traditional MVPDs will be hit by cord-cutting and other long-term industry trends along with a growing shift to virtual MVPDs.

Notably, OTT TV services such as Sling TV (Dish Network) and DirecTV Now (AT&T) have linkages to traditional pay TV operators, as does Hulu, which is partially owned by Comcast’s NBCU. PlayStation Vue, fuboTV and YouTube TV are currently among the services that aren’t attached to a traditional MVPD.

Against that backdrop, TDG sees legacy pay TV penetration falling from 81% of U.S. homes in 2017, to 60% in 2030, TDG predicts.  Virtual MVPD penetration, meanwhile, will grow from 4% of U.S. homes to 14% during that span – “up 350% but from a very small base,” TDG said.

Earlier this month, MoffettNathanson analyst Craig Moffett forecast that virtual MVPDs will end 2017 with about 4 million subscribers (with 962,000 added in Q3 2017 alone).

RELATED: Decline of Traditional Pay TV Accelerates in Q3

"TDG said early on that the future of TV was an app. Unfortunately, most incumbent MVPDs weren't taking notes," Joel Espelien, TDG senior analyst, said in a statement. "The question is no longer if the future of TV is an app, but how quickly and economically incumbents can adapt to this truth and transition to an all-broadband app-based live multi-channel system."

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