According to Craig Moffett and Michael Nathanson of MoffettNathanson Research, those who identify as sports fans and also watch live news are the least likely to cut the cord and that by 2024, the number of pay-TV homes will drop to 73.2 million households from the 83 million that they predict will remain at the end of this year.
In the second quarter of 2021, MoffettNathanson’s most recent Cord-Cutting Monitor report showed that traditional players lost another 1.35 million subscribers, only a small boost compared to their loss of 1.57 million in Q2 2020. Cable subscription losses spiked at 644,000 in Q2 2021 versus 593,000 in the same quarter of last year.
MoffettNathanson reported that by Q3 2021, there were 84 million pay-TV households, with 71 million with traditional distributors and 13 million on vMVPDs. Non-pay-TV homes jumped in the same quarter to 39 million.
The analysts believe that pay-TV households will be down to 83 million by year-end and that the number of traditional pay-TV homes will be the same number of non-pay-TV homes by 2024.
Although sports viewing seems to be bouncing back, Moffett and Nathanson said the cord-cutting would most likely continue at a 4% to 5% annual pace. Viewers who describe themselves as sports fans appeared to be around 58 million households. People who watch both sports and live news are more likely to remain a pay-TV household. This particular group is around 53 million strong.
The report said that they, “believe the 18 million … pay-TV subscribers who are regular news viewers (but do not watch sports), and the 7 million who don’t watch sports or news are at risk for further cord-cutting.”
It adds on to say, “Sports fans are not abandoning traditional pay-TV at all. In fact, we estimate the number of regular sports viewers within the linear ecosystem (traditional pay-TV or vMVPDs) has increased by over 2 million to 58.4 million in 3Q 2021 from 55.8 million 3Q 2019… We estimate that the drop in linear TV subscribers has come exclusively from people who do not view sports, and the increase in sports viewership has come primarily from people who either have cut the cord or never had a Pay TV subscription in the first place.”
Finally, “we expect sports leagues and media owners will become more aggressive in moving sports content over-the-top as it appears to be driving incremental reach without cannibalizing sports.”
As of last week, ESPN has shrunk another 10%, leaving them in 76 million American households. In fiscal 2020, they had 84 million, a significant decrease from ESPN’s peak of 100 million homes reached decades ago. Meanwhile, ESPN+ reached 17.1 million subscribers in Q4 2021, up 6.8 million subscribers from 2020.
Graybo’s data predicts that by 2026 the broadcast TV market will only have a 28% customer share of global sports fans. The company stated, “broadcasters and sporting rights holders must begin prioritizing their video strategies to match what fans demand.” This already began when the MLB started lessening its schedule on ESPN in favor of ESPN+ after they negotiated a new rights deal with the linear platform.
MoffettNathanson remarked, “If more sports content moves OTT, then perhaps some casual sports viewers are also at risk for further cord-cutting.”
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