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The global pay TV market is experiencing a significant shift, with subscriber numbers dropping by nearly ** million between 2021 and 2023. This trend reflects changing viewer preferences and the increasing popularity of streaming services.

Streaming services challenge pay TV dominance

In the United States, a major pay TV market, over half of TV households are now without a traditional cable, satellite, or telco TV subscription. Moreover, the pay TV penetration rate fell by ** percentage points between 2014 and 2023, and only around *** in adults subscribed to such services as of September 2023. This decline is largely attributed to the rise of over-the-top (OTT) video services and streaming platforms, which offer more flexible and often less expensive alternatives.

Cost comparison favors streaming options

However, while the subscription fee for VOD services was affordable to the majority of consumers at the beginning of the streaming era, the cost of subscribing to multiple ad-free streaming platforms is now nearly equivalent to traditional pay TV in the United States. As of early 2024, the combined cost of the top SVOD services Netflix, Disney+, Prime Video, Hulu, Max, Paramount+, and Peacock without ads totaled U.S. dollars, compared to around *** dollars for a typical pay TV service. In contrast, for the ad-supported plans of the same platforms, the consumer pays half the amount of pay TV, further incentivizing cord-cutting. This flexible pricing structure, coupled with the convenience and content variety offered by streaming platforms, continues to challenge the pay TV industry's ability to retain subscribers.