Report: Pay-TV Subscriptions to Drop 27% by 2024; Streaming Apps to Pick Up the Slack

Pay-TV services are showing their age as subscribership continues to fall, leading to a projected 76.7 million subscriber decrease by 2024, according to a report by Parks Associates. This drop would represent a 27% decline since the industry’s 2014 peak.

In response, the industry is moving towards an over-the-top (OTT) business model with major companies making deals and acquisitions to further those goals. OTT services are platforms that bring entertainment to customers via the internet, outside of the traditional broadcast, cable, and satellite TV models. The OTT format places transitioning services in direct competition with the over 300 direct-to-consumer streamers operating in the American market.

“There has been substantial innovation over the years, but streaming’s debut changed the trajectory of the modern video service industry,” said Paul Erickson, Director of Research for Parks Associates. “The evolution of streaming video has given consumers immense choice in how, when, and what they watch.” Erickson goes on to state that a lack of long-term contracts in the streaming industry allows viewers to easily switch between offerings, using free trials and reduced subscription prices to their advantage as they learn which streamers best suit their tastes.

This hasn’t left the streaming space unaffected as the report highlights a 48% churn rate (the rate at which consumers end their subscriptions) during the first quarter of 2022. Constituting a 10% rise over the past two years, the trend suggests a noncommittal view on streaming services as consumers search for the perfect streaming fit, subscribing and canceling as necessary.

Pay-TV companies have been attempting to balance the budget as they faces losses from streaming competitors for years, at times pushing the burden onto consumers. In 2021, Comcast raised eyebrows when it added a rebroadcasting fee for local stations to their customers’ bills. Dish Network CEO Charlie Ergen recently commented on these additional costs when noting that local rebroadcasting fees are becoming unwieldy, leading to a more restrictive cost-benefit analysis when providing live coverage to Dish’s audience.

Cable companies are fighting back, sometimes aggressively so. Charter Communications and Comcast made headlines in April when they announced a partnership to create a new streaming platform in hopes of gaining a foothold in the industry. More than just a service, the joint venture promises to create streaming hardware that pits them head-to-head against Roku, Amazon Fire Stick, and the plethora of Smart TVs already available on the market.

Everyone has essentially accepted that the traditional broadcast and cable arrangement is being left beyond in favor of streaming. How quickly the migration away from Pay-TV takes to be complete is up for debate, but there is no doubt that consumers are searching for cheaper and simpler ways to get entertainment and legacy models are increasingly incapable of meeting that demand.