U.S. Pay-TV Operators Cut Q3 Sub Loss by 50%

The bleeding continues for pay-TV operators in the U.S. — but at a reduced rate. New data from informitv contends the top 10 domestic pay-TV operators lost a combined 860,000 subscribers in the third-quarter (ended Sept. 30). The sector lost 1.67 million subs during the previous-year period.

Through nine months of the fiscal year, pay-TV operators have lost a combined 4.72 million subscribers, leaving the market at around 72.28 million subs. That’s an 8.2% drop from last year when the market had 78.73 million subs.

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“The rate of television subscriber decline in the United States has reduced since the first quarter of 2020, when the top 10 services had combined losses of 2.33 million,” observed Dr. William Cooper, the editor of the informitv Multiscreen Index. “There is still a secular decline in this mature market, but it is important to remember that six out of ten television homes in the United States still subscribe to one of these services.”

Excluding Cox Communications, which does not report subscriber data, Comcast Cable lost 253,000 subs, compared with a loss of 427,000 the previous-year quarter. AT&T jettisoned 627,000 subs across its satellite (DirecTV), telco and online television (AT&T TV) platforms, compared with a loss of 952,000 last year.

Charter added 53,000 subs — about half of the 102,000 sub additions in the previous quarter. Dish Network lost 57,000 subs, while adding 203,000 Sling TV subs. Verizon lost 61,000 Fios TV subs. Altice USA lost 67,800 subs, while Mediacom and Frontier lost 13,000 and 42,000 subs, respectively.

 

Sling TV Q3 Sub Growth Cools; Dish TV Sub Loss Increases

Dish Network Nov. 6 said it added 203,000 Sling TV subscribers during the three months ended Sept. 30, down 5.2% from the addition of 214,000 subs during the same period in 2019. This decrease in sub additions was primarily related to lower Sling TV activations, increased competition, including competition from other SVOD and live-linear OTT service providers, and delays and cancellations of sporting events as a result of COVID-19.

Dish ended the quarter with 2.46 million Sling TV subs, which is down 8.6% from 2.69 million subs a year ago.

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At the same time, Dish lost 87,000 legacy pay-TV subscribers, 32% more than a sub loss of 66,000 last year. This increase in subscriber losses primarily resulted from lower Dish subscriber activations, partially offset by a lower churn rate.

The Colorado-based satellite TV operator ended the period with just 8.96 million pay-TV subs, down almost 6% from 9.49 million subs the same time last year.

Report: U.S. Pay-TV Sub Loss Increased 18% in Q2

With the migration of pay-TV subscribers to alternative (i.e. streaming) home entertainment channels ongoing, the number of U.S. linear TV subscribers dropping service increased 18% to 1.57 million in the second quarter, ended June 30, according to new data from Leichtman Research Group.

The Durham, N.H.-based firm found that while the Q2 sub loss was almost 24% less than in the 2.06 million lost in Q1, it surpassed the 1.33 million shed in the second quarter of 2019.

The top pay-TV providers account for 82.4 million subs — with the top seven cable companies having 44.7 million video subs, satellite TV services 23.3 million subs, the top telephone companies 8 million subs, and the top publicly reporting online pay-TV services generating 6.4 million subs.

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Key findings for the quarter include:

  • Satellite TV services lost about 885,000 subs in 2Q 2020 — compared with a loss of about 860,000 subs in 2Q 2019;
  • The top seven cable companies lost about 500,000 video subs in 2Q 2020 — compared with a loss of about 455,000 subs in 2Q 2019;
  • The top telecom providers lost about 160,000 video subs in 2Q 2020 — compared with a loss of about 95,000 subs in 2Q 2019;
  • The top publicly reporting online TV services (Hulu + Live TV, Sling TV, and AT&T TV Now) lost about 25,000 subs in 2Q 2020 — compared to about 80,000 net adds in 2Q 2019;
  • Charter Communication’s Spectrum platform bucked the trend, adding about 100,000 pay-TV subs.

 

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“This quarter marked the sixth consecutive quarter with over 1 million pay-TV net losses; still these losses were about a half million fewer than in 1Q 2020,” analyst Bruce Leichtman said in a statement. “The pay-TV industry as a whole continues to rapidly lose subscribers.  However, the wide disparity in performance among top providers in the quarter demonstrates the significance of individual corporate strategies.”

Pay-TV Providers Subscribers at end of 2Q 2020 Net Adds in 2Q 2020
Cable Companies
Comcast 20,367,000 (478,000)
Charter 16,168,000 94,000
Cox* 3,770,000 (50,000)
Altice 3,102,900 (34,600)
Mediacom 676,000 (17,000)
Atlantic Broadband** 311,845 (2,800)
Cable One 290,000 (13,000)
Total Top Cable 44,685,745 (501,400)
Satellite Services (DBS)
DIRECTV^ 14,290,000 (846,000)
DISH TV^^ 9,017,000 (40,000)
Total DBS 23,307,000 (886,000)
Phone Companies
Verizon FiOS 4,062,000 (83,000)
AT&T U-verse^ 3,400,000 (40,000)
Frontier*** 560,000 (34,000)
Total Top Phone 8,022,000 (157,000)
Internet-Delivered (vMVPD)
Hulu + Live TV 3,400,000 100,000
Sling TV 2,255,000 (56,000)
AT&T TV NOW 720,000 (68,000)
Total Top vMVPD 6,375,000 (24,000)
Total Top Providers 82,389,745 (1,568,400)

Roku Says Nearly 1 in 3 U.S. TV Households Have Cut the Cord

Roku July 21 reported that about 32% of U.S. TV households do not have a traditional pay-TV subscription (cable, satellite, telecom), while another 25% of households identified as “cord shavers” scaled back their service during the coronavirus pandemic. When asked about the intent to drop pay-TV in the next six months, 45% of the latter households said they were likely to do so.

Citing data from separate surveys of 7,000 Americans ages 18 and over in March, followed by 2,000 Americans ages 18 and over in May to understand changes amidst the pandemic, Roku found primary drivers for pay-TV termination to be the pandemic and lack of live sports.

“While we entered 2020 with significant momentum around cord cutting, we’re now seeing that the pandemic and the pause of live sports has caused consumers to rethink how they access home entertainment and what they are willing to pay,” Matthew Anderson, chief marketing officer, said in a statement.

Anderson said the abundance of free ad-supported VOD content, free trials to low-cost are contributing to a redo in home entertainment consumption.

Survey respondents said they saved about $75 per month dropping pay-TV, with some of the saving earmarked for SVOD services.

“The vast majority of [respondents] agreed that they are satisfied with their decision and wish they had cut their pay-TV service earlier,” Anderson said.

Value is an important factor in driving cord cutting. Nearly half of all U.S. TV household respondents said they have been watching more, free ad-supported TV during the COVID-19 pandemic than they did before. In addition, 40% of recent households that dropped pay-TV said that access to free trials and extended free trials to premium subscription services helped convince them to cut traditional pay TV service.

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Roku, which helped Netflix launch the subscription streaming video-on-demand market in 2007, offers a platform for third-party SVOD services, in addition to The Roku Channel branded AVOD platform.

Roku found less than 20% of cord-cutting households said they would re-subscribe to pay-TV when live sports returns. Instead, 31% said they were likely to subscribe to a live sports streaming service, such as ESPN+ and fubo TV. More than half (52%) of traditional and “cord shaver” households said they are likely to reduce their pay-TV package if televised live sports does not return.

Ampere: ‘Low-Level’ Pay-TV Sub Growth Continues Despite Rampant Cord-Cutting

With U.S. pay-TV operators shedding more than 2 million subscribers in the first quarter, new data from Ampere Analysis finds that worldwide pay-TV continues to grow — albeit slowly.

In a study representing 70 pay-TV operators representing about half of the world’s 1 billion pay-TV subs, subscriber totals increased 0.3% in Q1 than in Q4 2019, indicating that despite the challenging times facing the pay-TV business, and the threats from online competition, there is still at least some low-level growth — when including China.

When removing Chinese market leaders — China Telecom, China Mobile and China Unicom — there was a net decline of 0.7% in the quarter. This is an acceleration from the 0.5% decline seen in Q4 2019, and indicative of a worsening outlook for the pay-TV market outside China.

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Of the 70 companies followed, 42% saw growth in the quarter, with positive net additions of nearly 5 million subscribers. This was partially offset by the remaining 58%, which lost a total of nearly 3 million subs. The net effect was a growth of just under 2 million pay-TV subscribers in the quarter, according to Ampere.

Again, however, China continues to have a significant role in keeping the global pay-TV market buoyant. Outside mainland China, pay-TV operators in the rest of the world lost nearly 1.7 million net subs.

In fact, the trend outside China is worsening. In the same period 2019, the same group of companies lost 1.2 million net subs.

While U.S. cable and telecoms groups such as Verizon and Comcast saw significant net declines in subscriber numbers, they have been less badly hit by cord-cutting than their satellite rivals, including DirecTV and Dish Network.

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“Of the bellwether pay TV operators we’re tracking, U.S. groups represent more than half of those firms suffering net subscriber declines,” senior analyst Toby Holleran said in a statement. “But losses aren’t evenly distributed even here — IPTV and cable firms have shown more resilience as a consequence of their ability to better bundle communications and pay TV together, insulating themselves against the worst effects of cord-cutting.”

Pay-TV Lost Record 2 Million Subs in Q1

Another financial quarter, another 90 days of pain for the pay-TV market. The largest pay-TV providers in the U.S. — representing about 95% of the market — lost more than 2 million video subscribers in the quarter ended March 31, compared with a net loss of about 1 million subs in the same period last year, according to new data from Leichtman Research Group.

The top pay-TV providers account for 83.9 million subs — with the top seven cable companies having 45.2 million video subs, satellite TV services 24.1 million subs, the telephone companies 8.2 million subs, and Internet-delivered pay-TV services with 6.4 million subs.

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Satellite TV services lost about 1 million subs compared to a loss of about 810,000 subs last year. The top seven cable companies lost about 595,000 video subs compared 335,000 subs.

The top telecoms lost about 125,000 video subs compared to a loss of about 105,000 subs in Q1 2019. The top online TV services (Hulu + Live TV, Sling TV, and AT&T TV Now) lost about 320,000 subs compared to about 225,000 net adds in 1Q 2019

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“The record net losses were partly related to the impact of the coronavirus, but do not solely reflect consumers’ dropping services,” analyst Bruce Leichtman said in a statement. “Several providers cited a decrease in connects as a key component of net losses in the quarter, rather than an increase in disconnects.”

Pay-TV Pandemic: Record 2.33 Million Subs Lost in Q1

The steady drip of pay-TV subscriber losses has turned into a broken water main. New data from informitv finds that U.S. distributors lost a combined 2.33 million subscribers in the fiscal period ended March 31.

Pay-TV operators’ combined sub count fell below 75 million, down from 84 million during the same period in 2018. AT&T suffered the biggest losses, shedding 897,000 subscribers and an additional 135,000 AT&T TV Now subs, for a combined loss of over a million.

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Dish Network ended the quarter with 382,000 fewer satellite subs and 281,000 fewer for its Sling TV online television service. Comcast Cable lost 388,000 subs. It was its twelfth consecutive quarterly sub loss, with its total falling below 20 million for the first time in almost two decades.

Verizon Fios TV subs declined by 84,000, marking 13 consecutive quarterly falls, taking it down to 4.07 million, from a high of 5.86 million four years previously. Charter Spectrum lost 70,000 television subs, marking its ninth consecutive quarterly loss, down by over 400,000 in twelve months to 15.55 million.

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Altice, Mediacom and Frontier lost 97,700 television subs combined in the quarter, and a total of 372,600 over twelve months.

“This is the largest quarterly loss of television subscribers in the United States we have reported to date,” Dr. William Cooper, the editor of the informitv Multiscreen Index, said in a statement. “The coronavirus pandemic has contributed to this, but many service providers have been losing subscribers for some time. Notably, their newer online services are now no exception to this trend.”

The top 10 services for the United States in the Multiscreen Index now have 74.65 million television customers between them, accounting for 62% of television homes. Subscriber numbers are as reported by service providers, rather than analyst estimates. Cox Communications is not included in the top 10 as it does not report sub numbers.

“It is difficult to determine how far these [sub] losses can be attributed to economic conditions and how much to an accelerating long-term structural decline,” added analyst Dr. Sue Farrell.

AT&T Keeping DirecTV Cards Close to Vest

Dish Network’s Charlie Ergen may think it’s “inevitable” about a satellite TV merger with AT&T’s DirecTV, but AT&T COO John Stankey is keeping his cards close to the vest.

Speaking March 3 at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, Stankey appeared open to industry consolidation while underscoring the strength of satellite TV’s rural customers.

Characterizing any merger as “a little problematic” due to regulatory issues, Stankey reiterated that the $48.5 billion acquisition of El Segundo, Calif.-based DirecTV in 2015 was always about securing video customers for future distribution technology, i.e. over-the-top video and high=speed Internet.

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“We will continue to offer satellite and DirecTV where it has a rightful place in the market, places where cable broadband is not prevalent, oftentimes, more rural or less dense suburban areas,” Stankey said. “We’ll continue to offer it for customers on a stand-alone basis, who find its superior content offering to be something that they wish to have.”

AT&T’s WarnerMedia Entertainment is about to launch subscription service HBO Max in May, while just-released AT&T TV (formerly DirecTV Now) bowed March 2.

“We’re really pleased with what we saw [with AT&T TV] … that we would be able to replicate how customers were receiving the product in the other markets that we would enter where we own facilities and are able to pair video with broadband,” Stankey said.

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Regardless, at the time of the 2015 acquisition, AT&T U-verse and DirecTV had a combined 26 million customers in the United States and more than 19 million customers in Latin America, including Mexico and the Caribbean.

Flash-forward to the end of 2019 and AT&T had 19.5 million domestic pay-TV subscribers, with another 13.3 million in Latin America. That’s a decline of 25% and 30%, respectively.

Wall Street analyst Craig Moffett contends regulatory issues shouldn’t be a problem for DirecTV and Dish as they were in 2002 when the Justice Department sued to block a deal, saying the merger would stifle competition and hurt consumers.

“Satellite TV was growing by leaps and bounds at the time. Now it is in free fall. That alone may be enough to settle the debate; sure, two would be better than one, but both are credible bankruptcy risks on their own. Heck, they’d be a credible bankruptcy risk even together,” Moffett wrote in Sept. 30, 2019 note.

He contends a merger argument could best be presented to regulators as an act of preserving pay-TV for rural Americans without access to high-speed Internet.

“[That] would be a reasonably persuasive one,” Moffet wrote.

 

Verizon Revamps Pay-TV, Internet Options

Verizon, which has a declining Fios TV subscriber base and scant over-the-top video options (except for free Disney+), Jan. 9 announced it is reorganizing Fios options to consumers for television and high-speed Internet.

The telecom’s customers can now mix Internet and TV plans to match their needs, with Fios Internet plans starting at just $39.99 per month. “Mix & Match” also eliminates annual contracts.

“Customers are tired of having to buy a bundle with services they don’t want to get the best rates, and then discover that those rates didn’t include extra fees and surcharges,” Frank Boulben, SVP of consumer marketing and products, said in a statement. “We’re putting an end to the traditional bundle contract and putting customers in control.”

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Indeed, Verizon is offering three broadband options: 100 Mbps, 300 Mbps and Gigabit Connection. For new subscribers who choose Gigabit, the telecom is including a free Fios Home Router featuring WiFi 6 technology, a $100 Visa Prepaid Card and a year of Disney+.

Consumers also get a free month of YouTube TV or the option to choose five Fios TV channels from almost 200 available networks, in addition to mainstays ABC, CBS, NBC, Fox, Telemundo and Univision.

Verizon lost 220,000 Fios TV subs in the third quarter underscoring ongoing secular changes how consumers are watching television in the home — notably the rise of over-the-top video options such as Netflix, Amazon Prime Video and Hulu, in addition to online TV platforms such as Sling TV, YouTube TV and AT&T TV Now, among others.

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Verizon, which lost $1 billion in the short-lived go90 mobile video app venture, ended the quarter with 4.2 million Fios TV subs. That compared to more than 4.4 million in the previous-year period.

Major Pay-TV Providers Lost More Than 1.7 Million Subs in Q3 2019

The nation’s largest pay-TV providers representing about 93% of the market lost about 1.74 million combined video subscribers in the most-recent fiscal period, compared with a net loss of about 975,000 subs in the previous-year period, according to new data from Leichtman Research Group.

Pay-TV now accounts for about 84.8 million subs — with cable companies having 46.1 million video subs, satellite TV 26.3 million, telecom 8.6 million, and online TV services 3.8 million.

Satellite TV lost about 1.14 million subs in the third quarter, compared with a net loss of about 725,000 subs in Q3 2018. DirecTV had record net losses for the sixth consecutive quarter, while Dish TV had fewer net losses than in any quarter since Q3 2014.

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The top cable companies lost about 410,000 video subs, compared with a loss of about 245,000 subscribers in Q3 2018. Top telephone providers lost about 210,000 video subs, compared with a loss of about 80,000 subs last year.

Online TV services Sling TV and AT&T TV Now added about 20,000 subs, compared with about 75,000 net adds last year.

“This marked the fifth consecutive quarter of record pay-TV industry net losses,” Bruce Leichtman, principal analyst for Leichtman Research Group, said in a statement. “AT&T, the leading pay-TV provider in the U.S., accounted for 79% of the net losses in the quarter compared to 30% of net losses in 3Q 2018. This change is largely the result of AT&T’s strategic decision to increasingly focus on retaining and acquiring more profitable subscribers.”

Comcast 21,403,000 (down 238,000)
Charter 16,245,000 (75,000)
Cox 3,900,000 (40,000)
Altice 3,223,400 (31,900)
Mediacom 729,000 (18,000)
Atlantic Broadband 312,555 (added 5,294)
Cable ONE 298,063 (10,430)
Total Top Cable 46,111,018 (408,036)