Coronavirus: Cord-cutting catalyst - US pay TV penetration to drop below 60% this year
US pay TV penetration is set to drop below 60% this year, down from close to 80% in 2015. Coronavirus seems to be serving as a catalyst for TV habits, with Q1 2020 seeing almost 2m subscriptions wiped off the top 7 US pay TV providers, up from 1.2m in the same period last year. Satellite operators, DirecTV and Dish took the biggest hit, comprising almost 70% of total net losses, due, in part, to their inability to offer other services, such as broadband, through bundling. Dish also deactivated around 250,000 subscriptions across the airline and hospitality sectors amid the pandemic, believing many would return in coming quarters once lockdown measures are relaxed.
In the latest Ampere Consumer wave, the strongest motivation for taking a TV service among cable and IPTV subscribers was that it was bundled with another service, with almost a quarter of respondents saying it was their primary motivation. When satellite customers were included, it dropped to second place, behind “It has the TV shows I love to watch”, which accounted for 24% of pay TV subscribers.
Alongside consumer churn from pay TV, free, ad-funded services have seen growth, with ViacomCBS’s Pluto TV reaching 24.2m monthly active users in the US. Fox’s recently-acquired platform Tubi clocked up 200m viewing hours in April, up 150% from the same time last year, and Roku reported an 80% year-on-year increase in viewing hours. AVoD services are also ramping up content availability on their platforms, which is investigated here.
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