Gap widening between OTT and pay TV in US

The gap between OTT and traditional pay TV in the US is continuing to widen. 

According to Parks Associates, 82% of US broadband households subscribe to at least one OTT service. This is up 6% year-over-year. By contrast, 58% subscribe to a traditional pay-TV service, down 4% year-over-year.

The report goes on to note that 25% of US broadband households subscribe to a TV service offering a bundle of live channels via an online provider, including 13% who have both traditional and online pay TV services. 

Meanwhile, the adoption of vMVPDs increased by 4% to 18% in Q1 2021. The report adds that increased cord-cutting in the country will continue to lead to vMVPD adoption. 

Steve Nason, research director, Parks Associates, said: “The steady rise in online pay-TV adoption has made up for some of the significant drops in traditional pay TV. Video consumers are looking to online pay TV services, either from a traditional provider or vMVPD, to offer a similar viewing experience and content offering to traditional pay TV but at a lower price point. However, online pay-TV providers, who don’t typically generate content on their own, have had trouble stabilising subscriber costs as content fees continue to rise.”

“The COVID-19 pandemic accelerated many existing trends in the video services market. Moving forward, consumer preferences will continue to shift online as video viewers perceive these services to be less costly, more convenient, and more aligned with how they want to consume video programming.”