Key Points
- The number of households subscribed to traditional pay TV or an equivalent fell below a critical threshold during Q4 2025, according to an analyst.
- Broadcasters demanding more money for their channels has exacerbated the trend of cord-cutting as cable and satellite bills go up.
- Broadcasters will face challenges in the coming years if the trend continues.
The number of American households subscribed to a traditional pay television service or streaming equivalent fell below 50 percent during the current financial quarter (Q4) of the year, according to a new report from a Wall Street analyst on Thursday.
The report, from Madison & Wall’s Brian Wieser, said Q4 estimates put the number of pay TV subscribers at 66.7 million households, or less than half of the 113 million American households counted by the U.S. Census Bureau.
That puts overall penetration “right at 50 percent” in the fourth quarter of 2025, Wieser wrote, adding that the sector continues to lose share in tenths of a percentage point each quarter. Combined subscriptions were slightly above 50 percent in the prior quarter, suggesting the symbolic threshold was crossed sometime this fall.
The milestone represents a dramatic slide for the pay TV industry, which peaked during Q1 of 2018 with near 80 percent penetration. Since then, premium streaming services have entered the market with lower-cost plans that have provided cable and satellite customers a refuge from ongoing price hikes, which are exacerbated by demands from broadcasters for higher retransmission fees.
While many of those streaming apps have rolled out incremental price adjustments over time, the cost of a premium streaming service is still far below that of the traditional cable and satellite package, which now eclipses $100 per month. Streaming cable replacements, like YouTube TV and Hulu with Live TV, cost nearly $100 per month on their own, though some streamers have launched slimmer, cheaper packages that eliminate costly news and sports channels, or only offer news and sports.
Wieser said pay TV households declined 6 percent year over year in the third quarter, maintaining the industry’s multi-year trajectory of subscriber erosion. The trend has been driven by rising monthly costs, limited channel flexibility and the availability of lower-priced streaming alternatives, including free ad-supported television services that have gained scale over the past two years.
While the sub-50 percent threshold is “not a hard inflection point,” Wieser said it highlights the pressure facing advertisers that continue to rely on linear television for reach.
Though traditional programmers still depend heavily on MVPD distribution fees and linear ad revenue, the latest figures suggest continued structural challenges heading into 2026. If broadcasters continue to demand higher fees from cable and satellite partners — as they seem willing to do — that strategy will only convince more traditional pay TV customers to switch to streaming, which will depress their distribution fees and limit their appeal with advertisers.
