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:
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.