Parks: 82% of U.S. Broadband Homes Have at Least One OTT Service Subscription

Parks Associates disclosed that 82% of U.S. broadband households subscribe to at least one OTT service, up six points year-over-year, while 58% subscribe to a traditional pay-TV service, down four points year-over-year.

 

“The steady rise in online pay-TV adoption has made up for some of the significant drops in traditional pay-TV,” Steve Nason, research director, Parks Associates, said in a statement. “Video consumers are looking to online pay-TV services to offer a similar viewing experience and content offering at a lower price point. However, online providers, who don’t typically generate content on their own, have had trouble stabilizing subscriber costs as content fees continue to rise.”

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Dallas-based Parks reports that 25% of domestic broadband households subscribe to a TV service offering a bundle of live channels via an online provider, including 13% who have both traditional and online pay-TV services. Adoption of online TV increased four percentage points to 18% in Q1 2021. As cord-cutters or cord-nevers look for a more live/linear video viewing experience online, online  service uptake has picked up.

“The COVID-19 pandemic accelerated many existing trends in the video services market,” Nason said. “Moving forward, consumer preferences will continue to shift online as video viewers perceive these services to be less costly, more convenient, and more aligned with how they want to consume video programming.”

Comcast Cable Q2 Sub Loss Cools, Broadband Gain Skyrockets

As expected, Comcast Cable, the nation’s largest pay-TV operator, saw continued consumer migration away from linear television to over-the-top video distribution. The cabler said it lost 399,000 residential and business video subscribers in the second quarter, ended June 30, to finish the period with more than 18.9 million subs. That compared with a sub loss of 477,000 during the previous-year period, ending at 20.3 million total subs.

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Year-to-date sub losses top 889,000, which is par with 887,000 sub loss in the previous-year period.

On the flip side, Comcast added 354,000 high-speed internet subs, ending the quarter with 31.3 million subs. That compared with a gain of 323,000 subs and 29.4 million broadband subs in the previous-year period. Year-to-date, Comcast has added 814,000 broadband subs compared with 800,000 additions last year.

Cable revenue increased 14.5% to $7.1 billion in the quarter of 2021, reflecting higher revenue, partially offset by an 8.2% increase in operating expenses largely due to the return of live sports events.

“At cable, our performance was exceptional, highlighted by 11% revenue and 15% [adjusted pre-tax earnings] growth, the best broadband and total customer relationship net additions on record for a second quarter,” Comcast CEO Brian Roberts said in a statement.

Verizon: Fios TV Q2 Subs Down, Broadband Up

Verizon July 21 disclosed that while its legacy Fios TV service continues to lose pay-TV subscribers, the losses are more than offset by increases in high-speed internet subscriptions — gateways for third-party over-the-top video distribution into homes.

Verizon has no branded streaming service, but it is offering select mobile customers upwards of 12 months free access to Disney+ and Discovery+.

Fios TV ended the second quarter (ended June 30) with more than 3.7 million subscribers, which was down 270,000 subs from the previous-year period. In the quarter, Verizon lost 62,000 net subs compared with a loss of 81,000 subs last year.

At the same time, Fios broadband ended the period with almost 6.4 million high-speed Internet subs, up 421,000 subs from the previous year period. In the quarter, Fios added 92,000 broadband subs, compared with 10,000 net additions last year.

“The strength in our core business is driving higher revenues and strong demand for our products and services,” CFO Matt Ellis said in a statement. “We delivered strong operational and financial performance, giving us positive momentum as we end the first quarter. High-quality, sustainable wireless service revenue growth, a recovery in wireless equipment revenues, strong Fios momentum and excellent Verizon Media trends led the way.”

Parks: U.S. Pay-TV Industry Lost More Than 18 Million Subscribers From 2014 to 2020

The U.S. pay-TV and high-speed internet markets keep going in opposite directions.

Cable keeps losing viewers, while the streaming business continues to see gains.

New data from Parks Associates estimates that from 2014 to 2020, domestic pay-TV providers lost more than 18 million subscribers, while the broadband market exploded, with 40% of broadband households receiving a standalone service. In 2020, more than 7 million households dropped their pay-TV services. Traditional pay TV — television services delivered over an operator-controlled network to an operator-controlled device — declined by an estimated 10 million subs.

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“Online pay-TV service from virtual MVPDs, players that target the general population instead of offering services to a specific geographic footprint, grew by an estimated three million,” senior analyst Kristen Hanich said in a statement. “[Online TV] overall [has] grown to represent an increasingly large percentage of the pay-TV market — accounting for 16% of subs in 2020.”

In the domestic market, online TV represented the only segment of the pay-TV space to experience growth during the COVID-19 pandemic. Dallas-based Parks estimates that by the year 2024, the traditional pay-TV sub base will decline to just 53 million households — while online TV will increase to more than 23 million.

Internet service providers and others operating in the pay-TV space are thus seeking alternatives to traditional pay-TV in their consumer services arsenal. Cable operators have had some success in encouraging new bundling by launching Wi-Fi-first mobile virtual network operator (MVNO) services, primarily running on Verizon’s network. In the research company’s Q1 2021 survey, 4% of broadband households reported subscribing to Comcast Xfinity Mobile, Spectrum Mobile or Altice Mobile — making them some of the largest players in the MVNO space.

“U.S. ISPs collectively have over 110 million residential and small business internet subscriptions as of Q1 2021,” Hanich said. “The standalone broadband market will continue to grow, increasing pressure on these service providers to find the next combination of services that best leverages this massive subscriber base.”

Survey: Nearly Half of American TV Viewers Have Already Cut the Cord

Non-pay-TV consumers are set to become the predominant TV consumer in the next year, according to new data from The Trade Desk. Based on answers of more than 4,000 adult respondents from April 27 to May 5, the fourth “Future of TV” survey found that 47% of American TV viewers are already cordless, while 44% of Americans with cable TV anticipate pulling back or cutting service in the coming year.

Cord-cutting accelerated as programming such as live sports became unpredictable through the COVID-19 pandemic and consumers’ appetite for on-demand content grew. The shift to connected TV appears to be solidifying, with the majority of TV viewers aged 18 to 34 and 35 to 54 (60% and 53%, respectively) already without cable. These age groups are among the most coveted by advertisers.

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Streaming skyrocketed in popularity — even for sports viewing, which has traditionally been a driver for linear TV viewing. According to the survey, only 19% of TV viewers are returning to their pre-pandemic sports viewing habits. Meanwhile, 44% who watch sports are choosing a primary viewing source outside of linear TV. That number increases to 65% among sports viewers aged 18 to 34.

“We are entering a new TV normal, where new streaming viewing models sit side by side with traditional TV formats,” Tim Sims, chief revenue officer of The Trade Desk, said in a statement.

Sims said the shift to Internet-connected TV presents an opportunity for marketers to reach streaming TV viewers with more precision and accuracy because they can apply data to marketing campaigns in a way that’s not possible with linear.

“It provides incremental reach that’s an important element of a comprehensive TV ad campaign,” Sims said.

The research also indicates the current TV content arms race cannot be financially sustained for providers or consumers without relevant advertising, and consumers are becoming more receptive to advertising even on CTV.

According to the study, more U.S. TV viewers report watching streaming content with ads (44%) than without ads (33%). Indeed, nearly two-thirds of U.S. TV viewers (64%) don’t want to spend more than $30 in total per month on streaming services, making free or lower-cost ad-supported services more attractive to consumers.

A separate survey of 150 advertisers found that 92% of marketers believe that CTV is as good as, or outperforms, linear-TV advertising. New advertising budgets support this view, with 45% of marketers increasing their CTV budgets over the last year. Among those who shifted budgets to CTV, 91% said they will maintain those shifts or increase investments in CTV.

These benefits are particularly apparent for marketers when thinking about TV event advertising. In fact, 74% said that buying CTV ads in conjunction with live sports events can be more cost effective and impactful than classic sports sponsorships.

“Today’s marketers are under a lot of pressure to prove the ROI of every advertising dollar, and that has encouraged marketers to think about how CTV can provide incremental value as part of a TV ad campaign,” Sims said. “Advertisers want better cross channel measurement and the ability to tie that measurement to actual business outcomes. That means CTV is becoming an increasingly important component of most contemporary marketing plans.”

Report: Pay-TV Q1 Sub Losses Decline Slightly

Quarterly pay-TV subscriber losses have become a regular thing in an era of over-the-top video distribution. So there was news this week when longtime television services monitor Leichtman Research Group found that the largest pay-TV providers in the U.S. — representing about 95% of the market — lost 60,000 fewer combined subscribers in the first quarter (ended March 31) compared to the previous-year period. Operators lost 1.89 million net video subs in 1Q, compared to a pro forma net loss of about 1.95 million subs in Q1 2020.

The top pay-TV providers now account for about 78.7 million subs — with the top seven cable companies having 43.1 million video subs, other traditional pay-TV services having about 28.9 million subs, and the top publicly reporting online pay-TV services having about 6.7 million subs.

“Over the past year, top pay-TV providers had a net loss of about 4.8 million subs, compared to a loss of about 5.1 million subs over the prior year,” analyst Bruce Leichtman said.

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The report found that top cable providers had a net loss of about 775,000 video subs in 1Q 2021 — compared with a loss of about 595,000 subs in Q1 2020. Net cable losses in 1Q 2021 were more than in any previous quarter. Other traditional pay-TV services had a net loss of about 865,000 subs in Q1 2021 — compared with a loss of 1,150,000 subs in Q1 2020.

AT&T had 620,000 net losses in Q1 2021 — compared with 897,000 net losses in Q1 2020. Top publicly reporting online TV platforms had a net loss of about 255,000 subs — compared to a loss of about 210,000 subs a year ago.

Pay-TV Providers Subscribers at end of 1Q 2021 Net Adds in 1Q 2021
Cable Companies
Comcast 19.35 million (491,000)
Charter 16.06 million (138,000)
Cox 3.59 million (60,000)
Altice 2.9 million (54,400)
Mediacom 626,000 (17,000)
Atlantic Broadband 313,591 (4,796)
Cable One 252,000 (9,000)
Total Top Cable 43.1 million (774,196)
Other Traditional Services
AT&T 15.88 million (620,000)
Dish TV 8.68 million (130,000)
Verizon FiOS 3.84 million (82,000)
Frontier 453,000 (32,000)
Total Top Other Traditional 28.86 million (864,000)
Internet-Delivered Online TV
Hulu + Live TV 3.8 million (200,000)
Sling TV 2.37 million (100,000)
fuboTV 590,430 42,550

 

Total Top Online TV 6.76 million (257,450)
Total Top Providers 78.73 million (1.89 million)
Sources: The companies and Leichtman Research Group.

Report: Increased TV Services Consumption Straining Household Budgets

The proliferation of high-profile subscription streaming services is straining household budgets, according to a new consumer survey from Antennas Direct — prompting an overwhelming majority of subscribers to say that once the COVID-19 pandemic is over, they will likely cut back on the number of services.

The survey found that 50% of respondents signed up for one to two new SVOD services in 2020, bringing their monthly subscription costs above $100. Another 25% acquired three or more new services, bringing their monthly costs above $130.

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As a result, about 40% respondents said they had to limit spending elsewhere to afford TV subscriptions; 82% said they’ll cut back on TV services post-pandemic to pay bills; 33% are already planning to cut TV services post-COVID; and 39% plan to cut more than one type of service.

To cut costs, the report found that 60% of respondents currently share their streaming services with friends and family; 73% share subscriptions to make streaming more affordable for friends and family; and 65% share subscriptions to reduce costs in their own budget.

“While Americans have tolerated the financial strain that has come with
subscribing and sharing services, this simply isn’t feasible in the post-COVID world,” the report said. “The research shows that many plan to cut services and lower costs to fund household expenses or experiences outside of the home. This doesn’t just hurt providers, it hurts consumers who are forced to choose between paying their electric billing and having access to their local news to stay informed.”

Antennas Direct surveyed 1,200 consumers who regularly use cable or streaming service on subscription preferences, costs and viewing expectations.

The report echoed other studies that found the COVID-19 pandemic triggered a significant uptick in TV viewership across the country. With the majority of Americans confined to their homes, 5.4 trillion minutes of streaming and cable television was consumed in 2020, according to the Antennas Direct study.

 

Report: Global Pay-TV Market to Add 15 Million Subs Through 2026

Pay-TV isn’t dead. Despite living in an over-the-top video ecosystem, new data from Digital TV Research projects the addition of 15 million pay-TV subscribers between 2020 and 2026, bringing the global subscriber base to 1.02 billion. Through 2026, 92 countries will add pay-TV subs and 46 countries will lose subscribers.

China and India together will continue to provide just under half the world’s pay-TV subs. China will lose 10 million subs who see OTT video platforms as more appealing than traditional pay-TV. However, India will add 21 million pay-TV subs. The U.S. will be the biggest pay-TV loser — down by 16 million subs through 2026.

Online TV platforms will add 63 million subs through 2026 to take its total to 378 million. There will be 412 million cable subs (both analog and digital) by 2026 — 46 million fewer than the 458 million subs recorded in 2020. Satellite TV will lose 8 million subs to total 203 million. Pay-DTT (digital terrestrial television) will grow by 6 million subs to reach 25 million. Many of the DTT subs will be in Africa.

Hub: Average Consumer Nearing Six Different Video Sources in the Home

Americans have their bases covered when it comes to accessing video and television in the home. New data from Hub Research finds that the typical consumer accesses 5.7 different sources of TV content, including traditional pay-TV service, all available streaming services, and over-the-air reception through an antenna. That number jumped by nearly one full service since 2020, and is almost twice as high as it was in 2019.

Hub says about 80% of TV consumers now use a streaming TV service, 19% higher than the proportion who have a traditional pay-TV subscription (cable, satellite, or telecom). Not surprisingly, the proportion with traditional pay-TV has dropped seven percentage points since the same time last year.

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The percentage of consumers using any streaming TV service is up only 2% since last year. The large jump in the average number of services is attributed to an increase in the use of multiple streaming services, and greater adoption of free, ad-supported services such as Pluto TV, The Roku Channel and Tubi, among others.

Almost 60% of all TV consumers use two or more of the top SVODs: Netflix, Amazon Prime Video, Hulu, Disney+ or HBO Max. The percent using two or more top SVODs is up eight percentage points from 2020. Some of that increase is explained by the fact that HBO Max did not exist at this point in 2020, but it still demonstrates that consumers tend to add new streaming services without dropping their existing services.

Hub found that the percent of consumers using a free, ad-supported TV service is up eight points since last year, at 48%.

Don’t expect the size of consumers’ bundles to shrink: one in 5 (21%) say they plan to add new services in the next six months. And among those who plan to add, a strong majority say they’ll add without cutting anything they have currently.

In fact, those who currently have four or more services, and who expect to add new services, are even more likely to say they’ll keep everything they have (78%) without replacing anything.

A bit over half of TV consumers feel their bundle of TV services meets their needs “very well.” But the other half aren’t completely satisfied. With an average of nearly six TV sources at their disposal, nearly half feel their TV bundle meets their viewing needs only “somewhat well” (42%) or “not at all well” (6%).

Charter Widens Spectrum Pay-TV Subscriber Losses

Charter Communication’s trend avoiding pay-TV subscriber contraction appears to be coming to an end. The Spectrum TV provider April 30 reported residential video customers decreased by 156,000 in the first quarter (ended March 31), compared with a decrease of 70,000 in the first quarter of 2020, and 152,000 in the first quarter of 2019. Charter ended Q1 with 15.5 million Spectrum residential video customers.

Charter, the No. 3 pay-TV operator in the country, in 2015 was one of the first operators to launch a broadband-only service — dubbed Spectrum TV Plus — that included a free Roku 3 player priced at $12.99 a month.

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“We continue to execute well in a market environment that has not yet returned to normal,” CEO Tom Rutledge said in a statement. “We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3%.”

Charter ended the quarter with 29.2 million broadband subscribers.