Categories
News

Is Roku Correct? Half of US TV Homes Will Be Cord Cutters by 2024

This post may contain affiliate links and we may earn a commission. Learn more

Updated: February 16th, 2020 at 08:12 pm

Roku believes that by 2024, the number of homes without a traditional pay TV package will be almost half of all U.S. TV households.

Advertisement

Roku made the claim in a shareholder letter accompanying its latest earnings results. The claim is a big one considering traditional TV still dominates the landscape. Previous estimates suggested that in 2013 roughly 83 percent of U.S. TV households subscribe to a pay TV service.

By 2018, that number did decrease to around 78 percent and while the latter percentage is likely to include some cord cutting pay TV customers, the streaming TV market was not anywhere near as adopted as it is today. The sheer majority of that 78 percent was traditional pay TV customers. For example, the National Telecommunications and Information Administration suggests that in 2017, 73 percent of U.S. households specifically had a cable or satellite television subscription. That percentage is unlikely to have changed too significantly between 2017 and 2018.

Advertisement

Now, Roku expects that number to drop close to the 50 percent mark by 2024.

Is Roku correct?

There’s plenty of estimates and predictions being made about the streaming market and they all do vary to some degree. While it is unclear exactly which ones are correct, they all unanimously point to the continued decline of traditional pay TV in favor of modern streaming alternatives. Of course, that type of prediction doesn’t take much when even the main cable and TV providers are moving towards a streaming-first strategy.

All of which points to traditional TV packages being replaced by more of an a la carte solution in the years to come – even if they then end up bundled together into new TV packages. The question is, at what rate is it going to happen?

AVOD, SVOD and TVOD Apps
A la carte streaming has only just started

Again, the streaming market does appear to be accelerating although there’s another very clear factor in play here, and that’s the cord-nevers. This is the group of people who have never had a traditional TV package and it is this sector that is likely to really affect the streaming market. In fact, they already are and in the years to come (both short and long-term) the cord-nevers have the power to change everything.

The ‘cord-nevers decade’

Drawing on the National Telecommunications and Information Administration once again, while its data showed that in 2017 the percentage of U.S. households with a cable or satellite television subscription was 73 percent, of the remaining 27 percent, the majority (60 percent) were cord-nevers.

What’s more, the data very clearly illustrates that although all ages are now watching more content online than ever before, the younger generations lead the way in this respect.

Cord cutting and cord nevers data
Source: National Telecommunications and Information Administration

As the younger generation continues to mature with only having ever accessed TV online, the ratio of homes with a traditional pay TV package to those without will continue to change. For example, by Roku’s 2024 deadline, it would have been seven years since the data collected by the National Telecommunications and Information Administration. With the best part of a decade having passed in that time, even the youngest generation measured will be a significant part of the 2024 TV data set, and there will be a whole other decade of users in that 15-24 age range – also having only accessed video online.

The cord-nevers will continue to make their impact, and when that’s coupled with the continued growth of cord cutters (either voluntary or transitioned away by their provider), it could be the case that Roku’s prediction becomes reality.

Advertisement

Needless to say, Roku not only hopes, but expects to be the company helping both cord-cutters and cord-nevers to stream TV in 2024, and beyond.

Advertisement
John Finn

By John Finn

John started Streaming Better to help consumers navigate the live TV streaming and subscription service landscape. John has been writing about technology and TV-related services and devices since 2014 and believes the best streaming approach is to bounce between services as needed. Contact John via email at john@streamingbetter.com or on Twitter

Leave a Reply

Streaming can be frustrating but please be respectful and avoid personal information. All comments are moderated according to our comment policy.