There’s more evidence of a growing subscriber exodus threatening to hit the traditional pay-TV ecosystem.

In 2016, the industry dropped about a net 2 million subscribers — and an acceleration of pay-TV losses to more than 5 million annually “does not seem impossible,” RBC Capital Markets analyst Steven Cahall wrote in a report Thursday.

That estimate is based on a results of an RBC survey of 1,200 U.S. consumers, which found that around 55% of total respondents indicated they will continue to subscribe to traditional pay TV. That suggests 68 million U.S. homes “as the floor that ultimately keep the linear bundle,” according to Cahall, given that there are currently about 124 million households in the country. Currently, there are 86 million U.S. pay-TV households, per SNL Kagan.

The data “implies subscriber declines still have lots of potential downside,” Cahall wrote.

The RBC survey found that 21% of current cable, satellite or telco TV customers were considering switching to a lower-cost virtual pay-TV service (like Hulu with live TV, Sling TV or DirecTV Now).

While “virtual multichannel video programming distributors” like Hulu, YouTube TV and Sling TV are poised to grow, they’ll significantly cannibalize the existing base of traditional pay-TV customers, according to RBC’s analysis. About 15% of the addressable market for “vMVPDs” will come from legacy cable and satellite subs, with 10% from “cord-never” broadband-only households.

“We conclude that a ratio [of virtual pay-TV subscriber adds] that favors cannibalistic over incremental [growth] is modestly negative for media,” Cahall wrote. That’s because most of the broadband-delivered subscription TV packages are “skinny” bundles that strip out many channels.

The RBC study comes after research firm eMarketer this month significantly upped its estimates for cord-cutting in 2017, projecting a 33% increase in U.S. adults cancelling traditional pay TV to reach a total of 22.2 million by the end of the year. (Note that eMarketer’s figures represent individuals, not households.)

The biggest problem for traditional pay television remains consumer perception that cable and satellite TV is too pricey — and a bad value overall. Of existing pay-TV subs looking to switch to an internet-TV skinny bundle, 78% cited cost as the biggest factor.

The irony is that moving to a virtual pay-TV service may not actually save consumers money — so the rate of people dropping legacy cable or satellite may not be as high as the RBC survey suggests, once consumers calculate what they would actually pay month-to-month.

The total cost of a vMVPDs and internet service is around $100-$140 per month (assuming a price of $40 per month for an internet TV service plus standalone broadband in the $65-$100 range per month). In other words, Cahall noted, that’s similar to the cost of a cable TV and broadband bundle. Of the respondents on RBC’s survey who are current traditional pay-TV subscribers but are considering a vMVPD, 79% are paying more than $100 per month for internet and pay TV.

Still, traditional pay-TV and telecom providers suffer from a history of negative customer sentiment — subscription television and broadband are the lowest-rated categories among all industries tracked by the the American Customer Satisfaction Index. The flexibility promised by virtual MVPDs makes them more attractive than legacy cable and satellite operators, Cahall wrote.

“While they don’t necessarily save consumers much money, [internet pay-TV services] do provide more flexibility on cost due to the month-to-month arrangement, have lower switching costs between similar services and avoid much-hated ‘hidden fees’ like set-top box rental and [regional sports networks],” the RBC analyst noted.

Cahall added: “We broadly conclude that customers feel like they ‘get what they pay for’ on [virtual pay-TV services] vs. a perceived mistrust about the true cost of cable.”

Other findings from RBC’s survey:

Sports: 48% of respondents said access to sports wasn’t important. The 52% who said sports was “very important” or “somewhat important” was titled more toward men (59%) than women (46%).

48% of respondents said access to sports wasn’t important. The 52% who said sports was “very important” or “somewhat important” was titled more toward men (59%) than women (46%). Broadcast TV: 23% said broadcast networks were the most important content or platform to them, the No. 1 response (followed by “OTT” at 17% and “news” at 11%).

23% said broadcast networks were the most important content or platform to them, the No. 1 response (followed by “OTT” at 17% and “news” at 11%). Subscription VOD: 72% of respondents subscribe to (or use) an SVOD or over-the-top service. Netflix was the most popular, with 61% of respondents saying they’re subscribers, followed by Amazon Prime Video (41%), Hulu (18%), HBO Now (13%), Showtime (4%) and CBS All Access (3%).

72% of respondents subscribe to (or use) an SVOD or over-the-top service. Netflix was the most popular, with 61% of respondents saying they’re subscribers, followed by Amazon Prime Video (41%), Hulu (18%), HBO Now (13%), Showtime (4%) and CBS All Access (3%). TVs per Household: Of the respondents, 29% had two TVs in their house, 22% had three, 21% had one, 16% had four, 9% had five or more — and 2% said they didn’t have any TVs. (Numbers don’t add to 100% because of rounding.)

RBC surveyed about 1,200 U.S. adults 18 and older, which skewed older — 17% of the survey’s respondents were 18-29 vs. 22% of the U.S. population, while 29% were 30-44 vs. 25% of the U.S. population.

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