A new Parks Associates report, Video Services: State of the Market, 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.
“There has been substantial innovation over the years, but streaming’s debut changed the trajectory of the modern video service industry,” said Paul Erickson, Director of Research, Parks Associates. “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.”
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, which are tracked monthly with Parks Associates’ landmark service The OTT Video Market Tracker.
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 average a 48% churn rate in the first quarter of 2022, which is a ten percent increase in just two years.