The number of broadband-only households in the U.S. will grow to 37.2 million by 2022, up from 19 million in 2017, according to a new report from Kagan. That trend will only amplify industry angst about cord-cutting and the management of the traditional TV bundle.
“A perfect storm of long-term trends including increase in streaming content suppliers, widespread utility-like status of broadband, and a demographic shift attributable to shrinking baby boomers and rising millennials, is yielding higher broadband-only home gains than initially anticipated, prompting a significant upward update for our projections,” said Tony Lenoir, a senior research analyst at Kagan, which is owned by S&P Global Market Intelligence.
By 2022, the report projects, 38.4% of residential cable and telco wireline broadband subscribers will opt out of legacy multichannel video and get their TV from a combination from a mix of broadband and over-the-air broadcast signals.
Broadband-only homes will represent 29.2% of U.S. occupied households by 2022, Kagan estimates. By that time, traditional multichannel penetration will be in the low 60% range at that time.
Operators offering video as well as broadband, Kagan concluded, may be in an advantageous position in this environment. By 2020, cable will count more than 70 million broadband customers. The sector’s video subscriber count peaked at 67.1 million in 2001.
Don’t cry for traditional cable providers like Comcast, however, all of whom have poured billions into their broadband offerings to stay ahead of the curve. The repeal of net neutrality rules and Title II restrictions, Lenoir, noted, will continue to be a tailwind.
“Venturing into speculative territory,” he wrote. “one could even envision a future in which a saturated streaming market leads to paid prioritization, with monthly per-subscriber fees, akin to the legacy multichannel distribution universe’s carriage fees, imposed to ensure smooth delivery. After all, one could argue that without large, reliable and widely embraced delivery systems, content finds its kingdom vastly reduced. And when the prevailing delivery network has reached utility status, the leverage pendulum swings in the direction of its owner.”