November 16, 2021

Broadband-Only Subscribers are on the Rise, Forecast to Hit 54M by 2025

Broadband-only subscriber households are experiencing significant growth, according to a broadband-only subscriber forecast from market research firm TDG. The firm says that the number of households taking internet connectivity, but eschewing pay-TV services will grow from 38 million last year to 54 million in 2025, a five-year increase of 42%.

“By 2025, nine-in-ten U.S. households will use residential broadband, of which roughly half will use a pay-TV service from a legacy or virtual MVPD,” said TDG senior analyst Paul Hockenbury in a press release. “The space between the two—so-called broadband-only or BBO customers—offers video creators and distributors lucrative growth opportunities.”

Hockenbury said that ten years ago the category was dominated by early adopters. Today’s profile features “early-mainstream” types who jump in when the price is right, the technology has “peer-demonstrated benefits” and support is available.

TDG says that it accurately predicted streaming would first reduce pay-TV viewing time and then subscription rates. In 2010, the firm says, 8% of U.S. broadband households were in this category. That doubled to 16% in 2015 and 35% last year. A majority will be “MVPD-free” no later than 2026.

The predictions are in TDG research entitled “The Rise of MVPD-Free Households.” Other findings include:

  • Being without an MVPD service is not synonymous with not being a regular TV viewer.
  • BBO’s spend 28 hours each week watching TV, roughly 10% less than broadband households that subscribe to a legacy or virtual pay-TV service.
  • Without a pay-TV service in the home, consumers regularly must use non-MVPD content sources. This category includes streaming and over-the-air content.
  • About 60% of BBO TV time is spent watching streaming videos. This is 50% greater than their counterparts. Subscription video on demand is by far the TV content source used most often.
  • Netflix, Amazon Prime Video, and Hulu are the most popular SVOD apps among BBO’s as they are among their counterparts. However, in each case, BBO’s are more likely to use these services than those that subscribe to broadband and to legacy or virtual pay-TV services (BBPTV), especially Hulu (51% vs. 41%).
  • Two-thirds of BBOs watch free ad-supported streaming videos on TV. YouTube is by far the dominant service. It is used by 76%, twice its closest competitor, Pluto, which is used by 36%.
  • More than one-third of BBOs use a terrestrial TV antenna. This group views OTA content 12 hours each week.

The research highlights the growing importance of broadband as the core business for service providers and the importance of delivering the right customer experience to ensure low churn and long-term loyalty.