Introduction
Wireless did not end telephone service. It ended the landline. In the two decades after its peak the share of US households subscribing to landline telephone fell from nearly all of them to one in five. The decline never flattened: households swapped landline telephone for cellular service, and the remaining landline telephone households continued to skew older as mortality increased its share of churn.
Cable and satellite television are about four years ahead on the same displacement journey, measured from each product's own peak household penetration. Landline telephone did not fall to today's cable and satellite level of 29% until twenty years past its own peak. A key difference is what has happened to the broader categories. Nearly all of landline telephone was replaced by cellular service, largely preserving the category. Only a portion of cable and satellite cord-cutters migrate to internet-delivered TV: the vMVPD has kept under a third of what cable and satellite lost, where wireless kept essentially all of the landline's.
Distributors spent the decade after pay-TV's 2010 peak defending the subscribers they had: connectivity bundles, retention offers, price locks, and slimmer streaming plans. The moves did not pave a path for the next generation, which opted for lower-cost streaming services, social video, and free ad-supported television. Much of the industry has since concluded that the younger generation cannot be acquired. That conclusion is not completely accurate. Recon's data indicates younger households split in two: those who watch sports mostly buy pay-TV from a vMVPD; those who do not watch sports largely do not subscribe at all.
Table of Contents
- Executive summary 2
- How cable and satellite got four years ahead 3
- Cable and satellite: age is the moat, and it expires 6
- The vMVPD: a cheaper bundle, and the same problem 8
- The households outside pay-TV: less video, not different video 10
- What moves pay-TV's rate of decline 11
- How to read this analysis 12