The cord-cutters are in charge now.

According to Insider Intelligence, the percentage of American households with conventional pay TV subscriptions fell below 50% in 2022 for the first time ever. According to the business, only 65.1 million American households had traditional pay TV by the end of the year, a decrease of 9% from 2021 and a total of 49.7%.

Insider Intelligence—which makes its predictions and estimates for pay TV and OTT based on analysis of survey and web traffic data from research firms and regulatory agencies, historical trends, sales projections, reported subscriber numbers and several other factors—previously predicted in September 2022 that traditional pay TV wouldn’t drop below 50% until 2023.

According to the projection, the number of pay TV subscribers will fall by 7.1% this year to 60.5 million. And according to the company, by the end of 2027, only one-third (34.9%) of the nation will be covered.

Our calculations demonstrate that U.S. pay TV households began a downward trajectory in 2015 and haven’t stopped since. We don’t anticipate it to alter course again because it has been going downhill slowly, steadily, and unmistakably.

In addition to these trends, Verna pointed out that the audience for conventional platforms is aging, and programming, like live sports, that used to bind viewers to older platforms is increasingly moving to streaming. For instance, Thursday Night Football was transferred from Fox to Amazon in a multibillion-dollar agreement, and MLS Season Pass is currently being promoted on Apple TV+.

Overall, cord-cutting households will increase by 17.7% to 43 million in 2022, leading the charge in the total changes. The number is projected to increase by 10.8% more to 47.6 million by the end of 2023. And by 2027, the number will surpass pay TV by a wide margin, reaching 60 million, or roughly 44.1% of American homes.

Life is but a stream

Insider Intelligence reports that YouTube leads with 236.1 million individual viewers this year when looking at estimates of individual users in the U.S. on streaming and digital networks, which may or may not include paying subscribers. With 170.6 million subscribers, Netflix is the most popular subscription-only service. However, as the streaming behemoth cracks down on password sharing, the company anticipates a slight decline in Netflix viewership, with positive growth returning in 2024.

With 157.3 million subscribers, Amazon is in last place, followed by Hulu with 127.2 million and Disney+ with 112.7 million.

Before Warner Bros. Discovery combined HBO Max with Discovery+ this year, it had 89.7 million subscribers. And according to the business, NBCUniversal’s streaming service Paramount+ has surpassed Peacock, with 69.9 million subscribers as of right now.

“It’s simple to see why conventional and digital TV are going in opposite directions,” Verna said. “Each of the top 5 OTT video services caters to well over 100 million viewers (and over 200 million for market leader YouTube).

Don’t anticipate a sudden, significant change in upfront expenditure, despite the shifting tides. After all, it’s not uncommon for digital media to take years to monetize to the same extent as their traditional peers.

According to Verna, “TV ad spending is still a $60+ billion industry in the US and is expected to remain in that range for at least the next three years. It is still appealing to buyers who want to pledge in advance in order to lock in discounted rates and flexible terms because it continues to hold its own.

Verna clarified that the company expects modest growth in TV upfront spending in 2023 and that the estimate will be updated next month.


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