Leichtman: Pay-TV Operators Up Q1 Sub Loss to 1.95 Million

New data from the Leichtman Research Group found that the largest pay-TV providers in the U.S. — representing about 93% of the market — lost more than 1.95 million net video subscribers in the first quarter, ended March 31. That compared with a net loss of 1.91 million subs in the previous-year period.

The top pay-TV operators now account for about 74.1 million subs — with the top seven cable companies having about 40.5 million video subs, other traditional pay-TV services having 26.2 million subs, and the top publicly reporting online pay-TV services having about 7.4 million subs.

Leichtman found that the top cable providers had a net loss of about 825,000 video subs in the quarter, compared to a loss of about 780,000 subs in the same period in 2021. Other traditional pay-TV services had a net loss of about 625,000 subs, down from a loss of about 865,000 subs in 1Q 2021.

Top publicly reporting online TV platforms, such as Hulu + Live TV, Sling TV and Fubo TV, had a net loss of about 505,000 subs, compared to a loss of about 265,000 subs in 1Q 2021.

“Over the past year, top pay-TV providers had a net loss of 4.735 million subs, similar to a loss of about 4.82 million over the prior year,” Bruce Leichtman, president and principal analyst for Leichtman Research Group, said in a statement.

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Pay-TV Providers Subscribers at end of 1Q 2022 Net Adds in 1Q 2022
Cable Companies
Comcast 17.664 million (512,000)
Charter 15.721 million (112,000)
Cox 3.310 million (80,000)
Altice 2.658 million (73,600)
Mediacom 555,000 (17,000)
Breezeline 339,021 (7,708)
Cable One 238,000 (23,000)
Total Top Cable 40.485 million (825,308)
Other Traditional Services
DirecTV 14.300 million (300,000)
DISH TV (DBS) 7.993 million (228,000)
Verizon Fios (Telco) 3.566 million (78,000)
Frontier (Telco) 363,000 (17,000)
Total Top Other Traditional 26.222 million (623,000)
Internet-Delivered (vMVPD)
Hulu + Live TV 4.100 million (200,000)
Sling TV 2.252 million (234,000)
fuboTV 1.056 million (73,562)

 

Total Top Online TV 7.408 million (507,562)
Total Top Providers 74.115 million 1.955 million

Parks: 43% of U.S. Broadband Households With Pay-TV Likely to Switch to Online TV in Next 12 months

New data from Parks Associates found 43% of U.S. broadband households with pay-TV are likely to switch to an online TV platform in the next 12 months. While the absence of live sports and live performances during the coronavirus pandemic created challenges for online TV, services such as Hulu + Live TV and YouTube TV have been able to push the advantages in pricing, content and platform flexibility to drive subscriber growth.

Disney-owned Hulu with Live TV is now the largest online TV platform, with more than 4 million subscribers.

“Subscriber losses in traditional pay-TV continue, while the online TV category continues to grow, thanks to consumer price sensitivity and preferences for platform flexibility,” senior analyst Paul Erickson said in a statement. “Traditional pay-TV operators have online delivery in their roadmaps, if not already deployed. We expect online TV will continue to grow dramatically, and will gradually become the dominant offering in the pay-TV landscape.”

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Parks found that 17% of online TV subs switched from traditional pay-TV within the last twelve months. The factors driving defections include pricing and perceived value, while consumers positively respond to the flexibility of online TV to deliver unique and targeted content packages on a variety of connected entertainment platforms.

Prior to the pandemic’s effects on streaming video consumption, online TV sub growth was waning, with some services posting continued losses. Though COVID-19 has driven growth and in some cases recovery in the category, recent increases in online TV pricing make it uncertain how consumers will respond long term.

“Online TV has substantial opportunity if they can avoid the pitfalls that typically drive pay-TV customer dissatisfaction, such as rising prices and inflexible content and platform options,” Erickson said. “With content prices rising and competition increasing, online TV should remain conscious of consumer price sensitivity while keeping a strict adherence to a consumer-centric experience.”

Futuresource: Can Multiple SVOD Services Replace Pay-TV?

As consumers worldwide increasingly move toward over-the-top video distribution, new data from Futuresource Consulting finds that linear pay-TV still dominated consumer spending at 58% ($100 million) of the global home entertainment market in 2020. The London-based firm said overall spending reached $172 billion, which included pay-TV, SVOD, TVOD, electronic sellthrough, DVD and Blu-ray Disc. SVOD spending reached $55 billion, with Netflix capturing about 50% of all global subscription revenue. In 2019, SVOD revenue totaled about $36 billion.

“The sector is exhibiting phenomenal growth and driving overall growth of home video spending, with key services able to cultivate a large, well-rounded content offering that appeals to many consumers,” analyst Tristan Veale told the Society of Motion Picture and Television Engineers. “Combine this with the convenience of being able to pick up where you left off, no matter what device you decide to continue watching on, and it’s inevitable that SVOD will continue to power the growth curve. By 2024, we expect over a third of home entertainment spend will be on SVOD.”

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At the same time, transactional video, which includes packaged media, continues to slow with global spend reaching $17 billion in 2020

Veale contends that the market continues to favor of VOD, including SVOD and AVOD — driven by younger viewers. The older demographics still spend the majority of their time watching linear TV. The analyst said that while multiple services can co-exist, with consumers stacking services, a deeper integration is required with distribution platforms at a metadata level, as consumers continue down the multiservice route.

Futuresource suggests pay-TV and SVOD can co-exist via partnerships and mergers as both channels embrace digital distribution. While SVOD services have developed a business model targeting on-demand consumers, the platforms are increasingly pursuing live-sports deals, especially in Europe with soccer.

“SVOD services … are experimenting with scheduling and acquiring sports rights — two key pillars of the pay-TV industry,” Veale said. “The burning question is whether younger age groups will adopt the habits of their parents and grandparents as they grow older, or will their current video behaviors remain with them as they age?”