Comcast Lost 2 Million Pay-TV Subscribers in 2022, Broadband Sub Growth Cools

Comcast’s legacy cable pay-TV business continued an industrywide trend, losing 2 million subscribers in 2022, up from a loss of 1.66 million subs in 2021. The company ended last year with 16.1 million pay-TV subs, which was down about 11% from 18.2 million subs at the end of 2021.

The pay-TV subscriber losses underscore consumers’ ongoing migration from linear TV to alternative video distribution such as Netflix, Disney+, Prime Video, HBO Max, Hulu and Peacock, among others, and free ad-supported streaming television (FAST) platforms.

To help deliver streaming video to consumer households requires high-speed internet service, or broadband. Comcast remains the nation’s largest internet service provider, ending 2022 with more than 32.1 million broadband subscribers.

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At same time, that tally underscored a cooling off of broadband sub growth. The company actually lost 26,000 high-speed internet subs in the fourth quarter (ended Dec. 31, 2022). That compared with a gain of 212,000 broadband subs in the previous-year period. Comcast attributed the sub losses to the impact of Hurricane Ian in Florida last September.

For the fiscal year, Comcast added 250,000 broadband subs, down 81% from a gain of 1.33 million subs in 2021.

The decline in video subscribers helped lower Q4 programming expenses almost 6% in the quarter, partially offset by contractual rate increases. Programming expenses dipped 2.8% for the fiscal year.

Verizon’s Fios TV Lost 339,000 Subscribers in 2022

Verizon Jan. 24 disclosed it lost 80,000 Fios TV subscribers in the fourth quarter (ended Dec. 31, 2022) to end the fiscal year with a decline of 339,000 pay-TV subs. The telecom, which lost 281,000 pay-TV subs in 2021, ended 2022 with 3.23 million Fios TV subs.

At the same time, Verizon added 56,000 high-speed internet subscribers to end the year with more than 6.7 million broadband subs, up 3% from 6.54 million subs at the end of 2021.

The telecom, which offers mobile subs free access to third-party subscription streaming services AMC+ and Disney+ (including Disney bundle with ESPN+ and Hulu), recently launched +Play, a new platform enabling subscribers easier access to third-party SVOD services, including Netflix.

“Wireless mobility and nationwide broadband will be two of the most significant contributors to our growth for the next several years,” Verizon CEO Hans Vestberg said in a statement.

EAO: More Than 33% of All SVOD Services Operating in Europe Are American

Of the more than 3,100 subscription streaming and over-the-top video platforms operating in Europe in 2022, more than 33% are U.S. based services, led by Netflix, according to new data from the European Audiovisual Observatory, part of the Council of Europe based in Strasbourg, France. Another 20% of all commercial pay-TV operators in Europe are American based.

In addition to the European Union countries, the data covered Albania, Armenia, Bosnia and Herzegovina, Georgia, Iceland, Liechtenstein, Montenegro, North Macedonia, the Republic of Moldova, Norway, Serbia, Switzerland, Turkey, the United Kingdom and Ukraine.

Among pay-TV distributors operating in Europe, the Walt Disney Company, has a virtual market dominance operating in 45 European TV markets.

Among SVOD services, Netflix uses a centralized strategy with a single country of establishment from where it is targeting the European markets, according to the EAO. A core hubs strategy is used by the BBC, where typically a small number of countries serve as a basis to target various national markets. AT&T, by contrast, applies a decentralized strategy where a larger number of establishment hubs serve the European markets.

Nine countries account for 96% of on-demand video services mainly serving non-domestic markets. Ireland, the U.K. and the Netherlands are the hubs for the most significant U.S. global streaming players’ base of operations.

Among U.S. media companies operating in Europe, Warner Bros. Discovery and its majority parent, AT&T, rank No. 1 in market share across pay-TV, VOD and streaming. Other U.S. firms in the top 10 include Google, Disney, Apple, Comcast, Prime Video, AMC Networks and Paramount Network.

Netflix doesn’t make the list since it is singularly focused on streaming only.

Leichtman: Pay-TV Operators Lost 785K Subs, Added 825K Broadband Customers in Q3

High-speed internet service is a gift that keeps on giving to pay-TV operators while video subscribers continue to decline.

New data from Leichtman Research Group found that the largest pay-TV providers in the United States — representing about 92% of the market — lost about 785,000 net video subscribers in the third quarter (ended Sept. 30), compared with a net loss of 650,000 subs in the prior-year period.

The top pay-TV providers now account for about 71.4 million subscribers — with the top seven cable companies having about 38.6 million video subscribers, other services (telecom and satellite) having about 24.8 million subs, and online services (i.e., Hulu + Live TV, Sling TV, etc.) having more than 8 million subs.

“Spurred by a strong quarter from [online TV] services, pay-TV net losses in 3Q were more modest than in the first two quarters of the year,” analyst Bruce Leichtman said in a statement. “Not including YouTube TV, which does not regularly report subscriber totals, [online TV] had nearly 900,000 net additions in the quarter. This was the third-most quarterly net adds ever for the top publicly reporting online services.”

The pay-TV subscriber losses continue to be mitigated by ongoing high-speed internet subscriber gains.

Leichtman found that the largest cable and telecom providers and fixed wireless services in the United States — representing about 96% of the market — added 825,000 net broadband subscribers in Q3, similar to a gain of about 820,000 subs a year ago.

These top broadband providers account for about 110.8 million subscribers, with top cable companies having about 75.6 million broadband subs, wireline phone companies having more than 32 million subs, and top fixed wireless services having about 3.2 million subs.

“Over the past year, fixed wireless services have accounted for nearly 80% of the approximately 3.26 million broadband subscriber additions,” Leichtman reported.

Hub: Live-TV Content Mounts Viewership Comeback — At Netflix’s Expense

Viewers in the U.S. increased their consumption of live-TV content in 2022, while streaming video remained unchanged from 2021, according to market data from Hub Entertainment Research.

Specifically, the Boston-based company found that 23% of survey respondents watched live television content this year compared with 21% last year. Streaming video viewership remained unchanged at 75%.

The survey was conducted in October among 1,602 U.S. consumers with broadband, age 16-74, who watch at least 1 hour of TV per week.

“The steady, year-by-year increase we’ve seen since 2016 for online sources as the home base for favorite shows has plateaued in 2022,” read the report. “On the flip side, the proportion watching their new favorite from an MVPD set-top box has increased.”

At the same time, perennial streaming behemoth Netflix’s status as the go-to source for online content continues to decline. The percentage of respondents who sourced Netflix for new content dropped to 29% this year from 35% in 2021, and 38% in 2020 during the height of the pandemic. Live TV content preference increased to 21% from 15% in 2021. Hub found that when excluding Netflix, viewership of Prime Video, Hulu, Disney+ and HBO Max increased 4% collectively to 25%.

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Hub says the preference gap between Netflix and pay-TV is eight percentage points, and 4 percentage points between the other SVOD services.

Driving pay-TV viewership is the fact that four of the Top 10 shows cited by respondents are available on pay-TV, including “Yellowstone,” “House of the Dragon,” “Ghosts” and “NCIS.”

“Content is king. Cliché or not, it’s clear from these results that viewers will happily go to whatever platform has exclusive rights to the most popular TV shows and movies du jour,” Peter Fondulas, principal at Hub and co-author of the report, said in a statement. “Over the past few years, those shows have been increasingly offered by streaming services. But as franchises like ‘Yellowstone’ and ‘Game of Thrones’ demonstrate, streaming does not have a necessary monopoly on buzz-worthy content.”

Viaplay Ups Global Pay-TV/SVOD Subs to 6.4 Million

Norwegian-based pay-TV/subscription streaming video distributor Viaplay Oct. 25 reported it ended the third quarter (Sept. 30) with 6.4 million global subscribers — up about 78% from the previous-year period when it had 3.6 million subs. The streamer, which includes limited operations in the U.S. through NBCUniversal and Comcast, added 879,000 subs in Q3.

The service topped 1 million subs in Poland and Holland. The addition of the English Premier League rights in Poland and the Netherlands contributed to the growth, together with the new distribution agreement in Poland.

Notably, Viaplay saw reduced sub growth in the Nordics, which has become a hotbed for U.S. streamers Netflix and HBO Max. Viaplay upped its year-end target for international subs to 2.7 million from 2.5 million, while reducing the Nordics subscriber forecast from 4.8 million to 4.6 million.

The overall sub target of 7.3 million remains unchanged.

“As a result of the immediate effects of the general economic slowdown on advertising and subscription sales, the lower than anticipated premium subscription sales in Norway, and the strategic decision to discontinue an unfavorable distribution agreement, we are reducing our full year Nordic organic revenue growth target by approximately 10%,” CEO Anders Jensen said in a statement. “Conversely, international sales are expected to exceed our previous expectations, and we now expect full year total group organic revenue growth of approximately 20%.

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Leichtman: Near 20% Drop in U.S. Pay-TV Subs in Past 15 Years

The number of U.S. households subscribing to a pay-TV service continues to decline. New consumer research from Leichtman Research Group finds that 66% of TV households nationwide have some form of pay-TV service (cable, satellite, telecom, online TV) — down from 79% in 2017, 88% in 2012, and 85% in 2007.

About 31% of non-subscribers last had pay-TV service within the past three years, 35% had pay-TV service over three years ago, and 34% never had service. Among the latter, 52% are younger millennials, ages 18-34, compared to 27% of former pay-TV subscribers.

The report, which is based on a survey of 1,850 U.S. households, found that 73% of adults ages 45+ have a pay-TV service — compared with 57% of ages 18-44.

Notably, the more televisions a household has, the more likely it is to have pay-TV service. More than 73% of households with three or more TVs have a pay-TV service, compared with 65% with two TVs, and 52% with one TV. About 13% of pay-TV subs are likely to switch from their provider in the next six months — compared with 14% in 2020, and 13% in 2017.

“The decline in pay-TV subscribers is not solely a function of those disconnecting services, it is also related to a slowdown in those entering or reentering the category,” analyst Bruce Leichtman said in a statement. “Overall, about 10.5% of TV households last subscribed to pay-TV service in the past three years, 12% last subscribed over three years ago, and 11.5% never subscribed.”

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Digital TV Research: Pay-TV Subs to Reach 1 Billion by 2027

Despite ongoing consumer migration to over-the-top video consumption, the number of global pay-TV subscribers is projected to top 1 billion by 2027 — slightly up from 2021 as pay-TV continues to grow in developing countries, according to data analysis from Digital TV Research. This total represents 57% of TV households — down from the peak of 61% in 2018.

Among TV operators, satellite will lose 12 million subscribers between 2021 and 2027 as more homes convert to platforms that offer high-speed broadband.

There will be 367 million cable subs by 2027, 56 million lower than the 422 million recorded in 2021. The 2021 total includes 22 million analog subs. This total will fall to zero by 2027.

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“Given the increasing demand for fast broadband connections, online TV will be the pay-TV winner, analyst Simon Murray said in a statement. “IPTV will add 79 million subscribers to take its total to 440 million. [Online] will become the pay-TV leader in 2022.”

Streaming Video Represents 33% of All TV Subscriptions in the Nordics

New intel from Dataxis finds the pay-TV landscape in the Nordics has changed considerably since the introduction of OTT video services.

The region has been a testbed for some of the most popular streaming services when they first addressed the European market, with Netflix and HBO available there since 2012.

Fast-forward 10 years and the adoption of streaming services and its impact on content viewing consumption have produced a digital makeover to the local TV distribution industry.

Hollywood streaming services such as Netflix, Disney+, Paramount+ and HBO Max are aggressively pursuing operations in the Nordics.

The region historically counted as one of the most developed pay-TV markets in Europe, with virtually every household subscribing to a service, and an average monthly revenue per household of €25 in 2015. But a growing number of households have pulled the plug on their traditional TV plans in favor of standalone OTT platforms, driving historical TV operators into diversifying their service portfolio and introducing more flexibility in their bundles in order to retain customers.

Due to their role as forerunners of the streaming market in Europe, the Nordics, which include Norway, Sweden, Denmark and Finland, is the region with the largest number of streaming services.

To simplify video choices, content distributors have multiplied distribution deals with video-on-demand platforms to position themselves as super aggregators. Nordic telecoms became the preferred distributors for third-party service such as Paramount+, when it launched in the region in 2021. Britbox, the U.K.-based SVOD platform, launched in the Nordics in the first half of this year and chose C More (in Sweden, Denmark and Finland) and TV2 Sumo (in Norway) as its partners.

Streamers now represent a third of the total pay-TV subscriptions in the Nordics, against less than 18% in the rest of Western Europe. This penetration is leading to market saturation and consolidation, according to Dataxis.

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In Finland, the leading paid OTT services, Viaplay and Elisa Entertainment, operated by local telco and content producer Elisa, merged their portfolio into one bundled subscription at the end of last year.

The region’s TV broadcasters now operate their own streaming platforms, including Viaplay, which passed the 2.5 million subscribers last quarter, TV2 Play in Denmark, which reaches 800,000 households, or the Swedish platform C More, which counts around 1 million paying subs across 3 markets.

“If streaming services are less expensive to operate than historical pay TV platforms like satellite, and thus can be sold through way cheaper plans, significant pressure is put on traditional telcos to take down their prices to be able to follow up with streamers’ pricing and line of service,” Ophélie Boucaud, senior analyst at Dataxis, wrote in the report. “TV distribution revenues in the Nordics are expected to stagnate at around €2.8 billion despite a slow rise in terms of subscriptions as those will mostly count OTT plans, and more cord-cutters will switch off their expensive TV plans.”

Kagan: Inflation Driving Higher Pay-TV Subscriber Losses

U.S. consumers looking to cut costs amid soaring inflation could ditch cable video services in even larger droves, even as they migrate over to discounted cable wireless offerings, according to new data from Kagan.

Traditional video has been on a rapid decline for several quarters. In the first quarter of 2022, cable operators lost 913,365 traditional video subs, the largest such sequential decline going back to 2006.

Looking ahead, the current high-inflation environment may be causing even more consumers to cut the cord, especially as the number of new streaming options continues growing. The consumer price indexrose 9.1% from June 2021 to June 2022, the largest year-over-year increase since November 1981. Meanwhile, the price customers paid for cable and satellite television service increased 4.9%.

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According to survey data, traditional multichannel cord-cutters largely still cite cost as a chief reason for not having a pay-TV subscription.

But a growing number also indicates that streaming and/or a combination of streaming and over-the-air, or OTA, broadcast offerings fulfill their viewing needs. In the first quarter of 2022, 42% of survey takers said streaming and/or OTA were good enough substitutes to cord cut, up from 36% in the first quarter of 2017.

On the wireless side, analysts are more bullish and generally expect subscriber numbers to exceed the first quarter of 2022. Charter’s Spectrum Mobile announced during its first-quarter earnings call that it gained 373,000 mobile lines during the quarter and had 3.9 million lines as of March 31, with the number since then increasing to over 4 million. Comcast’s Xfinity Mobile added 318,000 lines in the first quarter, an all-time record result.

Both Comcast Corp. and Charter Communications have recently unveiled new offerings to win over streaming customers. During the second quarter, the two companies announced they will team up to produce a streaming set-top box.

Comcast, the nation’s largest cable TV operator, continues to hemorrhage video subscribers. The Philadelphia-based operator July 28 announced it lost 521,000 video subs in the second quarter, ended June 30. That was up 30% from a loss of 399,000 video subs in the previous-year quarter.

Charter’s video losses have been less steep, with the company ending March with 15.7 million video subscribers, down from 16.1 million in the prior-year period.

Comcast and Charter both rely on mobile virtual network operator agreements with Verizon Communications Inc. to support their wireless offerings.

High wireless adds earlier in the year were largely due to Comcast’s and Charter’s promotional efforts, which also continued into the second quarter, wrote Wave7 Research, a wireless research company. Xfinity is heavily pitching its “3-for-1 Bundle” via advertising, and Spectrum is pushing its $29.99-per-month unlimited plan.

In a sign of the success of cable wireless offerings, the National Content & Technology Cooperative, or NCTC, which represents more than 700 independent communications service providers, recently said it is close to reaching a mobile virtual network operator deal that would allow its member communications service providers to launch discounted mobile services by the fourth quarter of this year.

Analysts will also have an eye on increasing competition in the broadband space. New Street Research said household moves are slowing down after a boost during the pandemic-induced housing boom, which will reduce churn for all operators and depress broadband net adds for share gainers.

“If we layer in fixed wireless broadband, cable lost share of the overall broadband market in 1Q22,” NewStreet analyst Jonathan Chaplin wrote in a May note as reported by Kagan. “[Q1] may be the first time cable has convincingly lost share in the residential broadband market in well over a decade.”

Increased fiber competition is reportedly leading Altice USA to consider a sale of its Suddenlink business . A deal could be valued at as much as $20 billion, Bloomberg News recently reported, citing unnamed sources familiar with the matter. The news comes as Altice has struggled with declining subscribers. In the first quarter of 2022, the company’s pre-tax earnings fell to $951.2 million from $1.05 billion a year earlier.