Cord-cutting among U.S. consumers hit record highs in Q3, according to research firm MoffettNathanson, which reports total pay TV subscriptions dropped by 6.3 percent in the July through September period, up from a 5.2 percent decline in Q3 2021, and slightly ahead of the 6.2 percent contraction of Q2 this year. MoffettNathanson defines “pay TV” as paid subscription services, including from cable and satellite operators in addition to vMVPDs packaged through companies like Verizon and AT&T. The Q3 loss totaled roughly 655,000 subscribers, as compared to 617,000 from the same period last year, and 91,000 in Q3 2020.

As a result, about 61 percent of U.S. households were subscribed to pay TV at the end of Q3, “a level last seen in 1993, a year before the arrival of satellite TV in the U.S.,” MoffettNathanson says, pointing out there are now some 34 million “incremental” homes that “exist entirely outside the cable network ecosystem,” with the total number closer to 55 million.

“Virtual multichannel video programming distributors (vMVPDs) bounced back in the third quarter of 2022, but the uptick wasn’t enough to avert a worst-ever rate of decline for the broader pay TV sector,” writes Light Reading. “MoffettNathanson estimated that vMVPDs added 1.29 million subs in Q3 2022, rebounding from just +42,000 in Q2 2022 (typically a tough quarter for all pay TV providers) and improving from +955,000 in the year-ago period” to end Q3 with roughly 16.26 million subs.

The downward pay TV trend could have a negative spillover effect on broadcasters, who in recent years “have relied heavily on retransmission consent payments from pay TV providers,” says TV Technology.

BIA Advisory Services previously forecasted that 2022’s $14.55 billion in retransmission consent agreement fees will grow to $17.37 billion in 2030, “growth that will be difficult to maintain if the pay TV ecosystem continues to collapse,” TV Technology notes. The changing dynamic may also create further challenges for networks that rely on local and national broadcast TV advertising.

Broadcast is already facing increased competition for ad dollars in an expanding field of video streaming services. “Historically, the rise of pay TV helped expand the reach of broadcast content, which in turn helped their advertising efforts in reaching larger audiences,” TV Tech observes.

One somewhat positive sign is that “declining pay TV subscriptions have been coupled with higher levels of homes using TV antennas,” use of which stood at 18.6 million homes, or 15 percent of U.S. households, as of Q4 2021, according to Nielsen, TV Tech reports. “Those numbers are still much lower than the 55 million homes MoffettNathanson said are now outside the pay TV ecosystem of both traditional pay TV cable operators and newer vMVPDs like Hulu Live or Sling TV.”

Media buying giant GroupM predicts “traditional pay TV will reach less than 50 percent of U.S. homes by 2025,” with connected TV accounting for “nearly a third of all TV advertising by 2027,” according to Broadcasting & Cable.