A new report by Parks Associates reveals that pay TV subscriptions and revenues are on a continuous decline as consumers embrace OTT services.
The research firm forecasts that traditional pay TV will decline to 76.7 million households by 2024, the lowest penetration in a decade and a 27% drop from 2014.
According to Parks Associates’ OTT Video Market Tracker service, "Traditional pay-TV companies are making their move to streaming and are rebranding, making big acquisitions, and forming new partnerships. As they enter the streaming market, new OTT services join more than three hundred direct-to-consumer streaming services in the US market alone."
Meanwhile, the firm's associated Video Services: State of the Market report adds that "with so much choice and no long-term contracts for streaming video services, churn across all OTT service providers is increasing, and services are struggling to retain their viewers."
Parks Associates data indicates that OTT subscription services averaged a 48% churn rate in the first quarter of 2022, "which is a ten percent increase in just two years."
Paul Erickson, director of research, Parks Associates, contends, “There has been substantial innovation over the years, but streaming’s debut changed the trajectory of the modern video service industry. The evolution of streaming video has given consumers immense choice in how, when, and what they watch. The ease of trialing, subscribing, and cancelling services has created new dynamics and challenges for content companies and service providers.”
Later this year, to further examine these trends and explore new strategies in their wake, Parks Associates will host its in-person Future of Video: OTT, Pay TV, and Digital Media conference from December 12-14 at California's Marina del Rey Marriott, sponsored by Adeia, FPT Software, Symphony MediaAI, Comcast Technology Solutions, and Metrological.