Less Than Half of US Households Now Subscribe to Pay TV

The proportion of US households that subscribe to traditional pay-TV services dropped below half for the first time, as the jump in cord-cutting was bigger than expected, according to Insider Intelligence. By the end of 2027, that proportion will approach just over one-third.

Only 65.1 million households in the US still had traditional pay TV by the end of last year, down 9.0% from 2021. That brought the percentage of US households subscribing to pay TV down to 49.7%, compared to 55.4% in 2021. This is a steeper decline than predicted in Insider Intelligence’s September 2022 forecast, when they estimated this share would not drop below 50% until 2023.

“Streaming services have evolved to offer many advantages over cable and satellite packages,“ said Paul Verna, principal analyst at Insider Intelligence. “They’re more affordable despite having raised prices, they provide more flexibility for stopping and starting service, and they increasingly carry programming that used to exist only on legacy systems, like live sports. Also, as they mature, streaming services are building libraries of must-see, digital-only content. This gives viewers more and more incentives to cut the cord and sign on with digital video providers.“

The current forecast now predicts pay-TV households will drop another 7.1% this year to 60.5 million, or 45.6% of US households. By the end of 2027, that figure will drop to 34.9%. This means the number of cord-cutting households jumped more than expected last year.

The number climbed 17.7% to 43.0 million. In September 2022, Insider Intelligence forecast a 14.2% jump. They now expect that, by the end of this year, cord-cutting households will increase another 10.8% to 47.6 million, exceeding one-third (35.9%) of households for the first time. By the end of 2027, the figure will exceed 60 million, or 44.1% of US households.

“The availability of key content, specifically live sports, on streaming platforms will drive cord-cutting in the coming years,“ said Oscar Bruce, forecasting analyst at Insider Intelligence. “Thursday Night Football moved from Fox to Amazon Prime Video in 2022. NFL Sunday Ticket will switch from DirecTV to YouTube when the new season starts this fall. As more marquee programming migrates online, we expect more households to cut the cord in favor of cheaper digital alternatives.“

Among the digital video services, YouTube leads with 236.1 million viewers this year, which includes both paying and non-paying viewers. Among the subscription-only services, Netflix leads with 170.6 million viewers. A slight drop in Netflix viewership is expected this year as the company cracks down on password sharing, but we predict a return to positive growth in 2024. Amazon is second this year with 157.3 million, followed by Hulu with 127.8 million. Disney+ currently ranks fourth with 112.7 million viewers. A distant fifth is HBO Max with 89.7 million. Paramount+ will overtake Peacock, which is limiting free access, to bring up the rear with 72.6 million viewers.