What a difference two months make. In late January, SNL Kagan forecaster Tony Lenoir made what he deemed an “aggressive” prediction when he said that the number of homes subscribing to broadband — but not pay TV — could grow 83% from the end of 2016 to 28.0 million in 2021.
Now he says the prediction “could end on the conservative side given the speed at which the TV ecosystem and U.S. broadband landscape are evolving.”
The subscription data for the end of 2016, he says, “should settle the debate” about whether pay TV providers need to be be concerned about cord cutting, or young people who never buy traditional TV service. Indeed, the popularity of broadband-only subscriptions “appears to be on the verge of a break to the upside.”
Most Pay TV Subscribers Stay Because It's Bundled With Broadband, Survey Finds
That’s noteworthy coming from SNL Kagan, long a go-to source of information about pay TV, and now a group within S&P Global Market Intelligence.
Lenoir noted that last year ended with about 15.4 million homes, or 13% of the U.S. total, electing to pay for broadband but not traditional pay TV. He sees that growing to more than 22% in 2021, he said in January.
About 2 million homes joined the broadband-only ranks over the course of 2016. The pace of cord cutting was slower the first three quarters of 2016 than it was in the same period in 2015. But it picked up in Q4. An additional 427,000 homes went broadband-only, vs the 395,000 increase in the last three months of 2015.
And the trend could accelerate. For example, the FCC is encouraging broadband providers to expand in rural America.
“Unserved zones gaining access to high-speed data is likely to perturb established video-delivery dynamics in those areas,” the Kagan analyst says.
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