Online TV Growth Slows Despite Record Q3 Pay-TV Subscriber Exodus

The most-recent fiscal quarter (ended Sept. 30) was not a good one for pay-TV operators, which continue to see increasing numbers of subscribers exit for video alternatives online.

Or not.

It was also a wake-up call to multi-video program distributors who think online TV is the answer to fickle pay-TV consumers.

 The cable, satellite and telecom operators lost a combined 1.2 million video subs, ending the quarter at 91 million, including 88.2 million residential customers, according to new data from Kagan, a media research group within S&P Global Market Intelligence.

Meanwhile, while many pay-TV subs are becoming cord-cutters, they’re not all migrating to online TV platforms such as Sling TV, DirecTV Now, Hulu with Live TV, YouTube TV and PlayStation Vue.

Kagan found that online TV services gained an estimated 2.1 million subs in the past nine months – not enough to offset a decline of 2.8 million pay-TV subs.

Indeed,Dish Network-owned Sling TV and DirecTV Now added just 75,000 subs in 3Q, compared to about 530,000 additions in the previous-year period. The additions were the lowest since the market’s launch in 2015.

Satellite had its worst quarter on record with a loss of 726,000 subs, according to Leichtman Research Group. Cable lost nearly 1.1 million subs – the worst performance since 2014.Telco subs fell by 94,000, led by Verizon, which jettisoned 63,000 subs.

Telephone providers lost about 80,000 video subs compared to a loss of 180,000 subs last year. Pay-TV services (excluding online TV) lost 1.05 million subs compared to a loss of about 940,000 subs in 2017.

“This marked the most net losses ever in a quarter for the pay-TV industry,” Bruce Leichtman, president and principal analyst for Leichtman Research Group, said in a statement. “Satellite TV had more combined net losses in than in any previous quarter.  These net losses were largely driven by corporate strategies focused on acquiring and retaining more profitable subscribers.”

Leichtman attributed some of the online TV sub growth slowdown to corporate parents’ emphasis on improving the profitability of the Internet-delivered flanker brands.

“[This] reduced net quarterly adds in the segment, resulting in [online TV] not helping to mitigate overall pay-TV losses to the degree they had in recent quarters,” he said.

Pay-TV Providers Subscribers at end of 3Q 2018 Net Adds in 3Q 2018
Cable Companies
Comcast 22,015,000 (106,000)
Charter 16,628,000 (54,000)
Cox* 4,035,000 (30,000)
Altice 3,322,800 (28,100)
Mediacom 793,000 (15,000)
Cable ONE 328,921 (11,191)
Total Top Cable 47,122,721 (244,291)
Satellite Services (DBS)
DIRECTV 19,625,000 (359,000)
DISH TV 10,286,000 (367,000)
Total DBS 29,911,000 (726,000)
Phone Companies
Verizon FiOS 4,497,000 (63,000)
AT&T U-verse 3,693,000 13,000
Frontier 873,000 (29,000)
Total Top Phone 9,063,000 (79,000)
Internet-Delivered (vMVPD)
Sling TV^ 2,370,000 26,000
DIRECTV NOW 1,858,000 49,000
Total Top vMVPD^ 4,228,000 75,000
Total Top Providers 90,324,721 (974,291)

 

 

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