Traditional U.S. pay-TV operators will lose more than 18 million subscribers between 2014-2022 as the broadband market tallies a 40% gain in households getting standalone service, according to a study released this week by market research firm Parks Associates

The firm’s report entitled “Modern Broadband: Shifting Landscape” shows new developments in the broadband market for business opportunities, operational needs, and competitive factors.

The study found that in 2020, more than 7 million households dropped pay-TV services. Traditional pay TV services — those using an operator-controlled network to an operator-controlled device — declined by an estimated 10 million subscriptions.

“Online pay-TV service from [Virtual Multichannel Video Programming Distributor (vMVPD)], players that target the general population instead of offering services to a specific geographic footprint, grew by an estimated 3 million,” stated Kristen Hanich Parks Associates senior analyst. “vMVPDs overall have grown to represent an increasingly large percentage of the pay-TV market — accounting for 16% of US pay-TV subscriptions in 2020.”

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The vMVPD business accounted for the only segment of the U.S. subscription TV market to show growth during the COVID-19 pandemic.

Parks Associates estimated that by the year 2024, the traditional pay-TV subscriber base will decline to just 53 million U.S. households — while vMVPDs will increase to over 23 million.

As a result, internet service providers with their own virtual pay-TV offerings are picking up the slack by providing alternatives to traditional pay-TV packages. Some U.S. cable operators have started to encourage new bundling by launching Wi-Fi-first mobile virtual network operator (MVNO) services, primarily running on Verizon’s network.

A Parks Associates Q1 2021 survey, found 4% of broadband households were subscribed to Comcast Xfinity Mobile, Spectrum Mobile, or Altice Mobile — making them some of the largest players in the MVNO space.

“U.S. ISPs collectively have over 110 million residential and small business Internet subscriptions as of Q1 2021,” said Hanich. “The standalone broadband market will continue to grow, increasing pressure on these service providers to find the next combination of services that best leverages this massive subscriber base.”

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By Greg Tarr

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