Citing the largest year-over-year pay-TV subscriber slide yet that occurred in the first quarter of the year, Craig Moffett of Moffet Research declares: “Pay TV is unmistakably declining and the rate of penetration decline is accelerating. The very fact that there have recently been more new households being minted each year than there have been new pay-TV households is proof positive that cord cutting is real.”
While making abundantly clear that this cord-cutting evidence didn’t mean “seismic changes” were just around the corner for the industry, Variety reports Moffett projects that the pay-TV penetration rate would sink from %87.9 this year to 82% by 2020. He characterized the cost-cutting population as being 1.9 million strong–though that’s a drop in the bucket against a pay-TV populace totaling over 100 million in the
Moffett sees a combination of two factors driving the acceleration of subscriber decline: 1) the lower-income households that he believes comprises the biggest part of the cord-cutting segment are getting priced out of the market by increasing subscription rates 2) the digital alternatives from Netflix to Hulu that are meant to be supplements to the pay-TV market end up being substitutes in the aggregate.