US pay TV revenue will drop from US$94.4 billion in 2019 to US$84.0 billion by 2024 as a result of subscription cancelling. Moreover, pay TV household penetration is forecast to drop significantly as well. It is expected to fall from an estimated 68.2% in early 2019 to 57.0% by year-end 2019. This is due to ongoing ‘cord cutting’ trends.
The traditional players within pay TV are wilting due to the growth of internet based over the top services (OTTs). However, they are attempting to counter the threat by implementing different marketing strategies.
How the US pay TV companies are fighting back
Comcast, for example, leads the pay TV market, and the cable segment in the US. The operator currently offers standalone TV packages along with Xfinity double, triple, and quadruple-play bundled plans. Comcast aims to improve ‘stickiness’ to its Pay TV offers. They are adding a wide range of video on demand (VoD) content through its Xfinity OTT platform. These will include popular TV shows and films that can also be downloaded to portable devices.
DirecTV ranks second in the pay TV and first in the DTH/satellite segment with 70.0% of all the DTH/satellite subscriptions in the US market. The operator leverages the Time Warner investment across AT&T’s telecom businesses. Currently the company uses content-based exclusives to drive interest in its subscription-based businesses. For example, by promoting access to popular TV shows such as Game Of Thrones and Chernobyl or by bundling wireless services.
Meanwhile, Charter is the third largest pay-TV operator in the US. Charter aims to bolster its value proposition by adding consumer selectable non-linear media. These features will be available through cloud DVR to its Spectrum TV App in coming months.
The pie chart below shows current TV subscription market shares to date in 2019.