Here’s another reason pay-TV operators are looking longingly at virtual MVPDs (V-MVPDs): Fully a quarter of all Americans who moved this past year no longer subscribe to a pay-TV service.
That’s significant because the Unites States has an incredibly mobile population, with between 11% and 14% of the population moving each year… about 40 million people on the high end. That’s about 15.5 million HHs if you assume the 2.58 people per HH that the Census Bureau says is the average, more if you weight it toward Millennials, where HH size is smaller (about 1.6 people on average).
The 25% number comes from a new report from Leichtman Research Group, which pointed out that the 25% figure was higher than in recent years and also reported the number of HHs subscribing to pay-TV has declined to an 11-year low, about 82%, the same as in 2005, and down from 87% in 2011.
LRG largely attributed the loss to pay TV’s inability to keep pace with a growing U.S. population, but also acknowledged that there was still cord cutting going on.
“The rates of those exiting the category, or intending to leave, are actually similar to recent years,” said Bruce Leichtman, president and principal analyst for LRG. “The decline in penetration is also due to a lack of those who are coming into the category, and the industry not keeping pace with movers and related rental housing growth.”
Among HHs reporting they had no pay-TV service, 14% said they’d been customers at some point during the past year.
LRG also pointed out that the average monthly spend on pay TV was up 4% in the past year to $103.10. It was the lowest increase in price for pay-TV service in the past five year.
V-MVPD potential is huge
The potential for V-MVPDs, meanwhile, made headlines earlier this week when a study from UBS forecast that services like Sling TV, PlayStation Vue and others could top 15 million subscribers by 2020.
“Over time, we expect V-MVPDs to be able to innovate faster than traditional distributors,” the UBS report opined. “Ultimately, while we expect V-MVPDs to start out attacking from below, we see them moving up market over time as any kinks in Internet distribution are worked through.”
More than a third (37%) of the 2,000 HHs UBS surveys said they would be open to using a service from a V-MVPD provider.
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