Major Pay-TV Providers Stanch Q3 Sub Bleeding

Ongoing pay-TV subscriber defections cooled a bit in the third quarter, ended Sept. 30, according to new data from Leichtman Research Group. The firm found that the largest pay-TV providers in the U.S. – representing about 95% of the market – lost about 120,000 net video subscribers in 3Q, compared to a pro forma net loss of about 945,000 in the previous-year period.

The top pay-TV providers now account for about 82.6 million subscribers – with the top seven cable companies having 44.3 million video subscribers; satellite TV services having about 22.6 million subs; telephone companies having 8 million subs, and Internet-delivered pay-TV services having 7.7 million subs.

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Satellite TV services lost about 775,000 in 3Q – compared to about 1.14 million subs in 3Q 2019. The top seven cable companies lost about 375,000 video subs compared to about 410,000 subs last year.  Telephone providers lost about 5,000 video subs compared to about 210,000 subs in 3Q 2019. Online TV services, which include Hulu + Live TV, Sling TV, AT&T TV Now and fuboTV, added 1.03 million subs, compared to about 815,000 net adds last year.

“With the return of live sports in 3Q 2020, Internet-delivered vMVPDs had more net additions than in any previous quarter, and pay-TV overall had fewer net losses than in any quarter since 1Q 2018,” analyst Bruce Leichtman said in a statement.

Leichtman said Hulu + Live TV is now the fifth largest pay-TV service in the U.S., and YouTube TV now has over three million subs, including one million net additions thus far in 2020.

Pay-TV Providers Subscribers at end of 3Q 2020 Net Adds in 3Q 2020
Cable Companies
Comcast 20.09 million (273,000)
Charter 16.23 million 67,000
Cox 3.71 million (60,000)
Altice 3.03 million (86,400)
Mediacom 663,000 (13,000)
Atlantic Broadband 317,387 5,542
Cable One 277,000 (13,000)
Total Top Cable 44.33 million (372,858)
Satellite Services (DBS)
DirecTV 13.6 million (690,000)
Dish TV 8.96 million (87,000)
Total DBS 22.56 million (777,000)
Phone Companies
Verizon FiOS 4 million (62,000)
AT&T U-verse/AT&T TV 3.5 million 100,000
Frontier 518,000 (42,000)
Total Top Phone 8.01 million (4,000)
Internet-Delivered (vMVPD)
Hulu + Live TV 4.1 million 700,000
Sling TV 2.45 million 203,000
AT&T TV Now 683,000 (37,000)
fuboTV 455,000 169,000
Total Top Online TV 7.69 million 1.03 million
Total Top Providers 82.61 million (118,858)

Study: 33% of SVOD Users Sign Up Just to Watch One Show

Free access coupled with a pandemic has created a perfect storm of developments to accelerate the consumer shift toward subscription streaming video as the destination for consumers’ favorite shows, according to a new report.

Hub Entertainment Research, citing data from an October survey of 1,604 U.S. broadband consumers who watch at least 1 hour of TV per week, found a widening gap between online video sources and traditional pay-TV as the go-to platform for new shows.

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Hub found that 68% of viewers watch their new favorite shows online, compared with 26% from a traditional pay-TV source. Netflix continues to be the top individual viewing source for new content, with 38% watching their recently discovered favorite on the SVOD pioneer’s platform. That’s 18% higher than those who watch a new favorite show on pay-TV.

The report cited “dramatic differences” in how viewers discover shows they watch online versus those they watch on pay-TV — the latter typically driven by advertising, while favorites watched online spread organically from person to person.

Indeed, when asked how they first found out about their favorite online show, the largest percentage of respondents (33%) said they heard through word-of-mouth. For favorites watched through a pay-TV platform, the top discovery source (30%) was advertising.

“Online sources are now the clear go-to for consumers’ favorite shows,” Peter Fondulas, co-author of the study, said in a statement. “What’s especially astounding is that Netflix, by itself, is far more likely to be the viewing home for new favorites than all linear networks combined.”

Notably, when asked what streaming service offers more, less or about the same number of original shows as other platforms, other than Netflix, Amazon Prime Video, Hulu, and Disney+, half or more of respondents couldn’t venture a guess.

Among those who did have an opinion, Netflix was far and away perceived as the original content leader, with two-thirds of viewers believing that Netflix produces more originals than other platforms. That led to one-in-three respondents saying they signed up for a streaming service to watch a single, exclusive show — most likely from Netflix, followed by Hulu and Disney+.

About 74% of these single-show subscribers decided to keep their subscription after the show has ended. That left 25% of respondents who canceled service once they’ve finished watching the show.

“As new streamers proliferate and as word-of-mouth and social continue to strongly influence the discovery of online content, it’s becoming rarer and rarer for viewers to turn on their pay-TV set-top box when they’re settling in to watch the shows they’re most eager to watch.”

Report: 60% of U.S. Households Have Pay-TV and SVOD Service

New consumer research from Leichtman Research Group finds that 60% of U.S. TV households have both a pay-TV service and at least one SVOD service. In addition, 20% of TV households have an SVOD service, but not pay-TV, 14% only have a pay-TV service, and 6% have neither pay-TV nor SVOD.

Among traditional (cable, satellite or telecom) pay-TV subscribers, 79% have an SVOD service, and 96% of those getting live pay-TV from an online TV service also have SVOD. Comparatively, 76% of pay-TV non-subscribers have an SVOD service.

These findings are based on a telephone survey of about 2,000 households from throughout the United States, and are part of a new LRG study, Pay-TV in the U.S. 2020. This is LRG’s 18th annual study on this topic.

“Traditional pay-TV services from cable, satellite, and telco providers are now in less than two-thirds of U.S households, while an increasing number of households are opting to get live pay-TV from [the Internet],” analyst Bruce Leichtman said in a statement. “Consumers continue to choose the video services that best fit their households’ needs.”

Other survey findings include:

  • 74% of TV households in the U.S. get a live pay-TV service (via a cable, DBS, telco, or online TV) — compared with 85% in 2015, 88% in 2010, and 82% in 2005;
  • 81% of adults ages 55+ have a pay-TV service — compared with 76% of ages 35-54, and 63% of ages 18-34;
  • 27% with both pay-TV and SVOD are ages 18-34 — compared with 46% with SVOD-only;
  • 38% of those that moved in the past year do not currently get a pay-TV service — a higher level than in any previous year;
  • 33% of pay-TV non-subscribers last had a pay-TV service within the past 3 years, 34% last subscribed more than three years ago, and 33% never had a live pay-TV service;
  • 13% of all TV households are pay-TV non-subscribers with a TV antenna.


Analyst: Nearly 40% of Pay-TV Subs to Drop Service by 2025

Cord-cutting among pay-TV households is increasing. So much so, one research firm is revising its forecasts. New data from The Diffusion Group finds that 36% of pay-TV subscribers will drop service by 2025 — up 9.5% from the previous five-year period.

TDG had previously estimated that by the end of 2020, pay-TV households in the U.S. would range from 83.5 million to 87 million. Instead, pay-TV households fell to 81 million at the end of last year.

Last year, TDG again recalculated pay-TV households going forward ranging from 75.7 million households to 76.7 million. Through six months of the year, pay-TV households held around 77 million.

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The same trends apply to online TV, which includes services such as Sling TV, AT&T TV, Philo, YouTube TV and Fubo, among others. TDG had projected online TV households would reach upwards of 14 million by 2019. Instead, there were less than 10 million (9.8 million) households subscribing to online TV through June 30 this year.

“Our 2017 forecasts underestimated the growth in cord-cutting and overestimated the uptake of [online TV],” Michael Greeson, president and principal Analyst at TDG, said in a statement. “Beginning in 2007, our five-year forecasts have been eerily accurate, but it was obvious that 2017 forecasts needed to be tweaked. We were within 5%, but at two years out versus five.”

According to TDG, in 2015, 16% of broadband households were likely to cancel their pay-TV service, with 7% moderately likely or definitely doing so. In 2020, 25% of broadband households are likely to drop service (up 56% from 2015), with 13% definitely doing so (up 86% from 2015).

As a result, TDG believes 14 million U.S. broadband households are more than likely to drop pay-TV going forward, with about half of that number doing so this year.

Analyst: Pay-TV Cord-Cutting Increasing

While cord-cutting among linear pay-TV households isn’t new, the pace of disruption is. New data from eMarketers found that U.S. pay-TV households dropping service will increase 7.5% in 2020, resulting in a market size of 77.6 million households. Previous data had pay-TV households dropping to 80.5 million. The data excludes online TV services such as Sling TV, AT&T TV, Philo and YouTube TV, among others.

The firm estimates that the number of households dropping pay-TV service combined with households that have never had a subscription, will increase to 51.7 million from 48.9 million.

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“The pandemic increased pay-TV losses because it tightened consumers’ wallets and caused the cancellation of live sporting events, which are one of the main draws of cable and satellite operators,” Ross Benes with eMarketer wrote in the report. “Pay-TV providers have also cut back on some of their promotional pricing to sustain profitability. But as prices increased, so did cord-cutting.”

Benes found that when including online TV with pay-TV, household declines looked “slightly less dire.” This year, 86.1 million U.S. households will have pay TV/online TV, a 5.9% year-over-year decrease, which translates to 66% of households having combined service.

2020 will end with 10 million U.S. households having online TV service, up from 9.5 million in 2019. When these products first launched several years ago, they were sold at a discount to attract new customers. But with TV affiliate fees growing, online TV prices have significantly increased, eroding one of their main advantages over traditional TV, according to Benes.

He wrote that while adding or dropping online TV service is much easier than traditional pay-TV, eroding price advantages between the two is hurting online TV market growth.

“When analyzed this way, the number of cord-cutters and cord-nevers combined will not surpass the number of pay-TV/online TV viewers this year,” Benes wrote. “However, their paths are converging, and most of the customers leaving traditional TV are not replacing it with online TV.”

Roku: Americans Spend More Time Streaming Video Than Watching Pay-TV

New data from a survey of 2,000 U.S. adults in the COVID-19 era conducted by Roku and The Harris Poll found that 85% of respondents stream video and prefer over-the-top video over pay-television.

Average reported streaming hours increased 19% year over year while average traditional TV viewing hours decreased 13%, according to the survey results.

“These fundamental changes highlight that now is the time for marketers to consider significant realignments of their advertising investments in order to reach consumers this holiday season and beyond,” Matthew Anderson, chief marketing officer at Roku, said in a statement.

Roku is the co-creator of the SVOD market, with Netflix.

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The survey was conducted in part to determine respondents’ attitudes toward gift giving during a pandemic, how they will shop compared to previous holiday seasons, and how their adoption of TV streaming is affecting purchasing decisions.

“How consumers are making their buying decisions and executing actual purchases are undergoing important changes,” Anderson said.

Survey highlights found that Americans are evenly split on their views about the future of the economy, with 70% planning to spend the same or more on gifts this year. Overall, consumers expect to spend a total of $885 dollars on average this year on holiday purchases, up approximately 2.5% from last year’s survey.

Nearly one-third of shoppers (31%) report that they plan to buy more gifts for more people this year because of sheltering in place rules that will bar them from visiting with family and friends.

Nearly one-third (31%) plan to buy a gift to support working from home for either themselves or someone else. Furthermore, as more families spend time at home streaming, many shoppers also report planning to pick up a new television this year with smart TVs topping the gift giving (and getting) list of many shoppers. In fact, 41% of Americans surveyed say they plan to buy a new TV.

With COVID-19 fueling concerns about in-person shopping, consumers now expect to do nearly two-thirds (65%) of their holiday shopping virtually. Streamers are fueling this surge in online shopping: 79% will do most of their holiday shopping online compared to 55% of non-streamers who plan to conduct most of their shopping digitally.

“Despite all of the uncertainty we see in the world today, this report highlights the fact that consumers plan to shop significantly this holiday season,” Anderson said.

The findings provide a clear blueprint for marketers seeking to engage shoppers during what will be a season of TV streaming. Most shoppers are now primary streamers with nearly one in three having already cut the cord according to Roku’s 2020 Cord Cutting survey.

According to the survey results, 2020 truly kicked off the decade of streaming in the U.S., with more than eight in 10 Americans reporting they are streamers. Not surprisingly, 96% of millennials, as well as 72% of Baby Boomers, cited themselves as streamers in this year’s report.

Not only are Americans streaming, they are also consuming a significant amount of advertising-supported streaming content that is reshaping how brands should think about the traditional TV advertising path to purchase.

Roku is a major distributor of ad-supported VOD programming through The Roku Channel.

Indeed, Roku claims 43% of consumers (and 66% of millennials) surveyed reported having seen an ad on a streaming service that caused them to pause the content, go online and shop for the product they encountered.

“We have arrived at a tipping point for the future of TV as we know it where a future involving 50% or fewer households subscribing to traditional pay-TV is now realistic in the short-term,” said Abbey Lunney, director of trends and thought leadership at The Harris Poll. “This shift to streaming, in combination with other consumer insights into the new path to purchase, demonstrate how marketers need to adjust their engagement strategies, not just for the 2020 holiday season, but for the future long term.”

Ampere: Pay-TV Added 3.1 Million Subs Globally in Q2

The pay-TV market may be in decline — especially in the United States — but globally, the industry saw an addition of 3.1 million subscribers in the second quarter (ended June 30), according to new data from Ampere Analysis.

The London-based research firm said that despite the loss of live sports due to the coronavirus pandemic — a major draw for pay-TV — emerging markets have seen subscriber gains, spearheaded by China adding 3.1 million subs, and offset by a loss of 1.1 million subs in the rest of the world.

The data is based on a “bellwether” of the top 70 reporting pay-TV operators, which represent more than half of the world’s 1.1 billion pay-TV subscribers.

The U.S. continued to be the loss leader, with 1.4 million subs decline in the quarter across bellwether companies — despite sub upticks from Charter and Dish Network. Other loss leaders included Australia, with Foxtel being hit particularly hard by the lack of sports in Q2; and Denmark, which has been suffering ongoing pay-TV losses since Q4 2016.

“While some countries are seeing pay-TV subscriptions suffer due to the pandemic, there is still growth in the market, driven partly by bundling of services,” senior analyst Toby Holleran said in a statement. “Cord-cutters in a number of developed territories like Canada — whose pay-TV market continues to mirror its North American neighbor — are being replaced by newer TV customers in emerging markets, leaving the market as a whole stable.”

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Holleran contends there is some sub growth left in developed nations such as France and Spain, which he said are bucking the trend of “stagnation” in Western territories.

Samsung: More TV Owners Stream Video Than Watch Linear Programming

Samsung, the largest manufacturer of Internet-connected televisions, or smart TVs, in the United States (ahead of LG Electronics), says consumers in the United Kingdom accessing over-the-top video on its TVs now exceeds consumers accessing linear programming.

The data from Samsung Ads Europe from January through June mirrors TV consumption habits of 50 million Samsung smart TVs in the United States the South Korean manufacturer disclosed in June. Specifically, Samsung found a 59% increase (or 38 minutes daily) in OTT video consumption across the United Kingdom, France, Germany, Spain and Italy. About 72% of survey respondents said they stream and watch pay-TV.

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“Streaming is no longer just an emerging behavior, but rather a central viewership method,” Alex Hole, VP of Samsung Ads Europe, said in a statement. “As such, advertisers need to adjust strategies to reach all TV viewers as they consume a wider selection of content from both linear and OTT sources.”

Hole said consumption of linear TV continues, but advertisers should consider avoiding “over-exposure” to this viewer at the expense of OTT video consumption.

Samsung has a vested interest in streaming video. It launched a few years ago an ad-supported VOD platform dubbed “Samsung TV Plus,” featuring 135 channels across various news, sports and entertainment genres.

Indeed, Samsung said it saw the largest spike in ad-supported video-on-demand (AVOD) consumption among consumers in the U.K., up more than 30%, or about 1 hour and 39 minutes per day. SVOD use increased 26%, while on-demand broadcast content increased 9% and TVOD remained flat.

“A media plan that understands the importance of targeted advertising across the connected TV environment is pivotal for advertisers looking to reach consumers across all their viewership habits,” Hole said. “This is heightened as households move seamlessly from linear to VOD services.”

Analyst: Pay-TV to Lose 50% of U.S. Subs by 2024

Cord-cutting among pay-TV households in the United States is real and growing — even during a pandemic. New data from eMarketers finds that 33% of all domestic pay-TV homes will cut the cord by 2024 — with 31.2 million households dropping either cable, satellite or telecom service this year. And 6.6 million households will cancel their pay-TV subscriptions.

“Consumers are choosing to cut the cord because of high prices, especially compared with streaming video alternatives, analyst Eric Haggstrom said in a statement. “The loss of live sports in [the first half of the year] contributed to further declines. While sports have returned, people will not return to their old cable or satellite plans.”

The ongoing secular shift toward over-the-top video leaves about 77.6 million domestic households with cable, satellite, or telecom TV in 2020, down 7.5% year-over-year and the biggest drop ever, according to eMarketer. The tally is down 22.8% from pay-TV’s peak in 2014. By the end of 2024, fewer than half of U.S. households will subscribe to a pay-TV service.

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The loss of viewers is having a major hit to traditional TV ad spending. Total spend will drop 15% this year to $60 billion, the lowest the industry has seen since 2011.  And while it will rebound some next year, eMarketer contends TV ad spending will remain below pre-pandemic levels through at least 2024.

Kagan: 37% of Broadband Homes Have Dropped Pay-TV

Pay-TV continues to lose appeal among Internet-connected (broadband) homes in the U.S. New data from Kagan, a unit of S&P Global Market Intelligence, found that 37% of broadband homes have cut the cord with traditional cable, telco or satellite TV distribution. That’s up from 12.5% of broadband homes six years ago.

The percentage of U.S. households without pay-TV service now hovers around 30%. In 2015, there were almost 100 million pay-TV households, a number that dropped to 86 million in 2019.

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Notably, the number of broadband-enabled homes has increased 80% from 2019 to 2020 due in large part to house-bound consumers cutting costs during the coronavirus pandemic.

“Given the economic headwinds of the first half, U.S. households likely were looking to cut back on discretionary spending, including entertainment,” analyst Tony Lenoir wrote in a note.