Cable TV’s downfall accelerates worldwide as cord-cutting surges

The rise of streaming services has resulted in more households cutting the cord on traditional cable services. Next year, experts predict we’ll see the first yearly decline in pay TV penetration worldwide.

By 2025, all regions will see a drop in pay TV penetration, or the number of pay TV subscriptions relative to the number of households, according to new data from Ampere Analysis. By 2028, the research firm estimates that global pay TV penetration will have fallen by almost four percentage points.

Global pay TV penetration has fallen in North America from 84% in 2009 to 45% in 2023, according to Ampere Analysis. The nearly halved penetration is due to a combination of high costs and competition from subscription video on demand services. The price tag for pay TV can be upwards of $90 a month, according to Rory Gooderick, senior analyst at Ampere Analysis.

Even with the decline, pay TV’s annual revenue generated per user will still be more than $1,100 in North America, Ampere Analysis said, which is the highest in any region.

However, North America and Latin America, largely led by Brazil, are driving the drop offs. In contrast, Asia Pacific and Europe have seen penetration growth over the last few years. Ampere Analysis said this is mostly due to low-cost IPTV services bundled into broadband packages for a low price.

“Despite the projected decline in the reach of pay TV products, cable and satellite platforms will remain a powerful force in the TV world, and important distribution partners for streaming products,” Gooderick said in the report.

Gooderick cited the deal struck between Disney and Spectrum in September. The agreement will give Spectrum customers the ad-tier version of Disney+ for free. In addition, Spectrum TV Select Plus customers will also get ESPN+ for free. Spectrum TV Select subscribers will also get access to the ESPN streaming service, but it’s unclear if it’ll be free as well.

In short, bundling is an opportunity for pay TV providers, according to the report.

“This package structure, already increasingly common in Europe and parts of Asia, offers a framework for traditional cable TV companies to transition their business into a streaming aggregation play, and stabilize subscriber trajectories,” Gooderick said. Cord Cutters News