86% Get Pay TV; Cord-Cutting Still Low

According to Leichtman Research Group, 86% of households nationwide subscribe to some form of multi-channel video service. While major multi-channel video providers reported a cumulative increase of less than 1% of subscribers over the past three years, penetration has slightly declined over that time due to a larger increase in the number of rental housing units. Multi-channel video penetration essentially peaked at 88% in 2010 following the digital transition, having increased from 82% in 2005.Among TV households that do not currently subscribe to a multi-channel video service, 40% subscribe to Netflix, 11% to Amazon Prime, and 7% to Hulu Plus. In total, 42% of non-subscribers get at least one of these three over-the-top (OTT) services, and 58% of non-subscribers do not get any. Overall, this results in 8% of all TV households watching over-the-air (OTA) broadcast TV only (down from 10% in 2010), and 6% watching a combination of OTA and OTT programming. This group includes about 1% of all households that do not subscribe to a multi-channel video service primarily because they can watch all that they want via the Internet or Netflix.Other related findings include:

• Nationwide, 20% of TV households with annual incomes <$50,000 are non-subscribers, compared to 9% with incomes >$50,000, a division that has been fairly consistent for years.



• Mean reported monthly spending on multi-channel video service is $83.25, an increase of 5.9% from last year.



• Multi-channel video subscribers with household incomes >$50,000 spend 18% more per month than those with incomes <$50,000.



• 10% of non-subscribers had subscribed to a multi-channel video service in the past year, and 7% plan to subscribe to a service in the next six months.



• Overall, about 1.4% of all TV households paid to subscribe to a service in the past year, but currently do not - a similar rate to the past five years.



• 5% of current multi-channel video subscribers did not subscribe at some time in the past two years and just watched programs from the Internet instead.